Developers of the USDe stablecoin—Ethena Labs—have been accused of improperly using 180 million native ENA tokens for farming. This was reported by a researcher known as Nomad.
Alert: Important Notice for ENA/USDe Holders
The Ethena team is currently using 180M ENA tokens (25% of SENA supply that earns sats) to farm sats in Season 3, effectively diluting other participants’ rewards. This raises significant concerns about the team’s ethics.
A thread
— Nomad (@Nomad02887202) October 27, 2024
The expert claims that the Ethena team controls approximately 25% of the total ENA involved in staking. Community members lock coins to earn Sats points during the third season of the airdrop.
Nomad warned that this situation could reduce the rewards for regular participants.
According to the investigation, in August, over 3 billion ENA were sent to a Coinbase Prime Custody address, allegedly intended for the core Ethena Labs team and Ethena Foundation, but were subject to a vesting period.
In October, following the launch of the staking mechanism, six Ethena-owned crypto wallets received 180 million ENA from Coinbase Prime Custody. All are listed on the Ethena leaderboard by Sats volume.
Besides in-network points, the protocol team also earned rewards in Ethereal points. The cluster of wallets associated with the developers accounts for about 20% of all Ethereal allocated to the community, Nomad claims.
Ethena sats leaderboard shows
0xB6dcCA1e6F3aB04B899cBf30cFcE22E6F9272C9F ranks 17th with 33.6B sats
0xC4bf1D0e09c400891ed780652b75b93fEE2c704e ranks 20th with 32.2B sats
0x1cF0Bc14FB1f9d0a3620d99bAA624944634d8AA5 ranks 24th with 28.8B sats…
— Nomad (@Nomad02887202) October 27, 2024
“No one really knows what income from financing and staking the Ethena team receives from the user fund of $2.6 billion, or if it directs all income to USDe holders,” the analyst noted.
In response to network participants’ inquiries, Ethena Labs representatives stated that the team does not use locked coins for farming.
We are aware of questions circulating in Discord and X as to whether investors or the Ethena team are earning Ethereal rewards via sENA using locked tokens.
We would like to categorically confirm to our community that absolutely no locked team or investor tokens are staked as… pic.twitter.com/v5SxgDwCTp
— Ethena Labs (@ethena_labs) October 28, 2024
“Any ENA sent from the wallets in question are unlocked according to the exact vesting schedule outlined in the original token distribution blog post. The wallets in question contain unlocked fund tokens that meet the criteria,” the statement said.
The protocol fund also assured the community that the specified addresses will not receive future airdrops and rewards from Ethereal.
In April, the market capitalization of the stablecoin from Ethena Labs surpassed $3 billion just four months after launch—faster than any competitors.
CryptoQuant advised USDe holders to monitor this parameter. According to calculations, under negative funding rates, the reserve fund can be maintained if the capitalization of the “synthetic dollar” does not exceed $3 billion.
Earlier, experts examined the asset’s vulnerabilities amid extreme market volatility.