Ethereum-based synthetic dollar protocol Ethena Labs was has dismissed unfounded claims that it participated in one of its recent crypto-farming events using 180 million Ethena tokens.
On Oct. 27, crypto investigator Nomad alleged that the Ethena team owns 25% of the total staked ENA (SENA) in its Season 3 farming event, which is actively used for farming Sats, which are rewarded to users for participating in various actions in the Ethena ecosystem.
Nomad has since redacted his initial claims (pictured below) after Ethena released official statements and details about the airdrop.
Source: Nomad
Ethena founder Guy Young directly confirmed to Cointelegraph that Nomad had redacted his claims after Ethena Labs clarified full details of the token unlock.
According to Young, the tokens in question were unlocked in accordance with the vesting schedule outlined in Ethena’s original token distribution roadmap.
The tokens belong to the Ethena Foundation, which has confirmed that the tokens will not receive any airdrop or related rewards from Ethereal.
“Nomad has since recanted their accusations and acknowledged that their concerns were unfounded. We would like to reiterate that absolutely no locked team or investor tokens are staked as sENA or are earning any rewards,” Young said.
Six Ethena-linked wallets in question
According to Nomad, the Coinbase Prime Custody address had received over 3 billion ENA tokens in August, which were potentially locked ENA tokens for the Ethena Labs core team and the Ethena Foundation.
In October, six crypto wallets belonging to Ethena received 180 million ENA tokens from the Coinbase Prime Custody address following the SENA staking launch back in September. All six wallets have been featured on the Ethena leaderboard for Sats farming.
Source: Nomad
In addition to Sats farming, the wallets with possible links to the Ethena team also earned Ethereal (ETRL) rewards.
The investigators further alleged that the Ethena team’s 180 million staked ENA tokens accrued 20% of all Ethereal points dedicated to its community members. Nomad highlighted the importance of trust when dealing with centralized finance entities:
“No one really knows how much funding revenue and staking revenue Ethena is generating from the $2.6 billion user fund or if it’s streaming all revenue to SUSDe holders.”
Ethena users suffered losses in previous staking events
The investigator pointed out anomalies in Ethena’s previously hosted Season 1 and 2 farming events that negatively impacted users, with many suffering financial losses.
The allegations against Ethena Labs garnered the interest of crypto community members on X, many of whom urged the protocol to respond.
According to Ethena, the staked ENA in question is unlocked foundation tokens that are eligible for participation. The protocol will provide further clarification to counter the accusations.
Source: Ethena Labs
Related: Ethena’s risky path: A synthetic stablecoin cautionary tale
On Oct. 25, algorithmic trading firm Wintermute announced accepting Ethena’s USDe as margin collateral for crypto OTC trading.
As a result of the partnership, Wintermute’s clients can post “USDe as collateral for options, [credit default swaps], forward, and spot trading.”
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