Ethena Labs, a synthetic dollar protocol on Ethereum, faces scrutiny after accusations emerged that it used 180 million Ethena tokens (ENA) to participate in its own crypto farming event, potentially impacting rewards for other participants.
On October 27, crypto investigator Nomad claimed that Ethena Labs held around 25% of all staked ENA tokens in its Season 3 farming event, which rewards users with “Sats” for various activities within the Ethena ecosystem. Nomad raised concerns over the fairness of the team’s actions, suggesting they dilute the rewards for regular ENA and USDE (Ethena US Dollar Equivalent) holders. Ethena Labs has denied any unethical conduct and indicated that it will soon clarify its stance on the matter.
Suspicious Wallet Activity and Reward Allegations
Nomad also flagged six wallets linked to Ethena, alleging that they each received 180 million ENA from a Coinbase Prime Custody account, a potential source of locked tokens for Ethena Labs’ team. The wallets were reportedly active in Sats farming and earned additional Ethereal (ETRL) points, drawing criticism from users who questioned the protocol’s transparency.
Nomad noted that the incident highlights the risks associated with centralized finance practices and raised concerns over the handling of funds within Ethena’s ecosystem, which reportedly manages about $2.6 billion in user assets.
Previous Losses in Staking Events
Nomad also pointed to issues in prior farming events hosted by Ethena, stating that Season 1 and 2 led to user losses. This, coupled with the current allegations, has stirred calls for a response from Ethena Labs.
Ethena Labs has since asserted that the staked tokens in question are unlocked foundation tokens allowed in staking and promised to address the accusations.
Summary Review: Ethena Labs has been accused of using 180 million ENA tokens in its own farming event, raising questions about fair competition and transparency. The company denies wrongdoing, pledging to clarify the situation soon.
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