Proposal: Reduction of Risk Committee members from 5 to 3

Background

After reflecting on how to best position the Risk Committee for success going forward, Ethena Labs Research is seeking to put forward a proposal for broad ENA tokenholder vote ahead of next week’s elections, suggesting a reduction in Risk Committee size from 5 to 3 voting members.

It is our strong belief that a reduction in Risk Committee members from 5 to 3 enables the following productivity and operational benefits:

1. A smaller committee allows each member to take clearer ownership over specific areas, which we believe will lead to stronger accountability and more proactive engagement across proposals. For example, one member can oversee Ethena’s DeFi lending exposure, one member can oversee Ethena’s Reserve Fund and redemption requirements, and another member can oversee Ethena Protocol/Partner integrations and backing assets. At present, 5 members are spread across multiple risk categories and do not have ownership over one specific area. Clearer ownership also ensures no tasks are left unattended by members assuming another member will handle it.

2. With fewer members, the Ethena Foundation would be able to increase member compensation meaningfully, enabling members to dedicate more time and resources to Ethena governance and risk. Several members have expressed a willingness to hire Ethena specific team members and build Ethena-focused public resources such as dashboards and simulation tools if they had more budget to work with.

3. While the sub-committee structure helped distribute work, we think a leaner group with well-defined responsibilities will ultimately be more effective in ensuring an equal workload between members. With 5 members, it was often the case that one or two members would handle the majority of the work as they were across multiple sub committees.

Next Steps

If this proposal passes via a majority vote from ENA and sENA holders, the usual election format would follow this vote, where ENA holders will elect the 3 voting members of the Ethena Risk Committee. Ethena Labs Research will be excluded as an option from this vote, and will continue to act as a non voting member in an advisory capacity to the Committee going forward.

If this proposal doesn’t pass, ENA holders will elect 5 voting members to the Committee as before.

Voting FOR will be voting in favour of reducing Risk Committee members from 5 to 3. This proposal will run until Monday 2nd February.

The Risk Committee member elections will begin on Tuesday 3rd February after the vote on risk committee size reduction concludes.