Stablecoin Depeg Risk

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Abstract

Stablecoin de-peg risk refers to the potential for stablecoins to fail to maintain their peg and fluctuate in value beyond a minute percentage on the open market. As all cash is held as USDC when idle, this risk is associated with potential losses.

While this policy will contemplate the use of additional stablecoins within our ecosystem, note that all stablecoins used should be (A) pegged to USD, (B) centralized in nature, and (C) publicly audited. At the time of writing, this is limited to Circle’s US Dollar Coin (USDC).

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Policy

Endaoment believes in the safe stewardship of cash and cash equivalents used in our financial products and to ensuring the solvency of underlying assets used by stablecoin providers. We mitigate this risk by conducting regular analysis of the underlying financial data and benchmarking it against alternative offerings in the space.

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Scope and Applicability

This policy applied to all Endaoment employees, contractors, board members, and those acting on behalf of Endaoment in any capacity, as well as any smart contracts, wallets, or other blockchain tools used by Endaoment. Non-compliance with this policy may lead to disciplinary action up to and including termination/removal. Should there be a conflict of law, the more stringent of either this policy or the applicable law will be applied.

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Operational Controls + Testing

Internal controls will be monitored and/or tested on a periodic basis determined by risk. Monitoring and testing outcomes will be used to inform the continuous improvement of internal controls in order to appropriately mitigate risk.

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Training

All Endaoment employees will receive training on Legal Compliance + Regulatory Risk to ensure policy continuity and application. New hires will be trained within their first 60 days, and mandatory incumbent trainings will be conducted bi-annually with all current employees.

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Governance

This policy will be reviewed by the executive team and updated semi-annually to ensure it remains up-to-date. Escalation of any questions, concerns, or requests for exceptions regarding this policy must be made to the Endaoment executive team and approved unanimously.