Ethena Labs Faces 180M Token Misuse Accusations
Claims allege misuse of 180 million Ethena tokens (ENA) in a recent crypto-farming event by Ethena Labs, an Ethereum-based platform for synthetic dollar assets.
According to the allegations, in its Season 3 farming initiative, Ethena Labs holds over 25% of the total staked ENA.
There have been claims of 180 million Ethena tokens (ENA) being misused during a recent crypto-farming event by Ethena Labs, an Ethereum-based system specializing in synthetic dollar assets.
Crypto investigator Nomad claims that Ethena Labs controls about 25% of the total staked ENA in their Season 3 farming program. This could lead to a distortion in the distribution of prizes intended for legitimate participants.
Participants in this event farm “Sats,” an in-platform reward given out for different Ethena ecosystem behaviors.
Nomad claims that regular users’ Sat’s rewards, especially those who own Ethena USDe (USDE), will be diminished due to Ethena Labs’ substantial involvement in the event.
Concerns regarding the fairness and openness of the reward distribution process have been raised by the Ethena team’s apparent involvement in staking such a significant number of ENA tokens.
There have been claims of 180 million Ethena tokens (ENA) being misused during a recent crypto-farming event by Ethena Labs, an Ethereum-based system specializing in synthetic dollar assets.
Crypto investigator Nomad claims that Ethena Labs controls about 25% of the total staked ENA in their Season 3 farming program. This could lead to a distortion in the distribution of prizes intended for legitimate participants.
Participants in this event farm “Sats,” an in-platform reward given out for different Ethena ecosystem behaviors.
Nomad claims that regular users’ Sat’s rewards, especially those who own Ethena USDe (USDE), will be diminished due to Ethena Labs’ substantial involvement in the event.
Concerns regarding the fairness and openness of the reward distribution process have been raised by the Ethena team’s apparent involvement in staking such a significant number of ENA tokens.
One hundred eighty million ENA tokens were allegedly sent from the Coinbase Prime address to six cryptocurrency wallets associated with Ethena Labs after the SENA staking launch in September.
These wallets received both Sats and extra Ethereal (ETRL) payouts and were listed on Ethena’s Sats farming leaderboard.
According to Nomad, these wallets earned 20% of all Ethereal points assigned by the community, a sizeable amount intended for community involvement.
With Nomad pointing out a need for more clarity about managing the $2.6 billion user fund and revenue distribution to SUSDe holders, the claims brought Ethena Labs’ revenue and staking transparency into the public eye.
Similar irregularities in Ethena’s prior farming activities, which purportedly caused consumers to suffer money losses, were also pointed out by Nomad.
The staked ENA involved are unlocked foundation tokens “that would fit under the eligible criteria,” according to Ethena’s statement.
“However, we have confirmation from the foundation that these tokens will NOT receive any airdrop or associated rewards from Ethereal.”
To increase its presence in the digital asset markets, Ethena recently teamed up with Wintermute, an algorithmic trading company, to enable customers to use Ethena’s USDe as margin collateral for over-the-counter (OTC) cryptocurrency trading.
The group also declared the creation of a new fiat stablecoin, UStb, last month.
Supported by Securitize Markets LLC and the BlackRock USD Institutional Digital Liquidity Fund (BUILD), UStb provides a unique substitute for the current USDe stablecoin.
Through Securitize Markets LLC, investors can receive interest in U.S. dollars with BUILD, BlackRock’s first tokenized fund, introduced in March 2024 on the public Ethereum blockchain.
Like a conventional stablecoin, UStb will be entirely collateralized by BlackRock’s BUILD and Securitize.
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