Ethena Labs has addressed recent allegations that it unfairly utilized 180 million of its own tokens to gain rewards from a crypto farming event it hosts.

Allegations Against Ethena Labs

Crypto investigator Nomad accused synthetic dollar issuer Ethena Labs of participating in its Season 3 farming program with approximately $61 million worth of ENA coins received from a Coinbase Prime wallet address. According to Nomad, Ethena team wallets staked around 25% of ENA’s total supply during the farming events. This allegedly allowed insiders to exploit the system and surpass genuine users. Nomad also claimed the tokens were supposed to be locked and non-tradable. This issue follows previous controversy surrounding the protocol’s Season 1 and Season 2 reward initiatives.

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.

Ethena Labs’ Response

Ethena Labs released a statement denying the allegations, asserting that the tokens in question were already unlocked in accordance with a publicly disclosed vesting schedule. The protocol refuted insider trading claims and stated that the flagged wallets would be ineligible for rewards or airdrops.

The wallets in question contain unlocked foundation tokens that would fit under the eligible criteria. Nevertheless, the foundation has confirmed to us that these tokens will NOT be recipients of any airdrop or related rewards from Ethereal.

Nomad’s claims and community skepticism have added to the platform’s contentious history since it launched the stablecoin USDe. Crypto leaders like Andre Cronje expressed doubts over the token’s design and collateral system, which bore similarities to the imploded Terraform coin UST.

Despite these challenges, USDe has a $2.61 billion market cap, and Ethena Labs secured a stablecoin partnership with Wall Street giant BlackRock. The Ethereum-based project also launched a community proposal to build a crypto exchange centered around USDe.

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