Ethena Labs denies misusing 180m ENA tokens

Ethena Labs rebutted claims that it unfairly used 180 million of its own tokens to gain rewards from a crypto farming event it hosts.

Crypto investigator Nomad accused synthetic dollar issuer Ethena Labs of participating in its Season 3 farming program with around $61 million worth of (ENA) coins received from a Coinbase Prime wallet address. According to the web3 sleuth, 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. The issue follows previous controversy surrounding the protocol’s Season 1 and Season 2 reward initiatives.

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.

Ethena Labs statement

Nomad’s claims and community skepticism have added to the platform’s contentious history since it launched the stablecoin USDe (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 a rocky road, USDe has a $2.61 billion market cap and Ethena Labs secured a stablecoin partnership with Wall Street mammoth BlackRock. The Ethereum-based project also launched a community proposal to build a crypto exchange built around USDe.