Ethereum-based decentralized finance (DeFi) protocol Ethena Labs is under investigation following allegations from crypto investigator “Nomad” that its development team engaged in an internal crypto-farming event.
The investigator claimed that the Ethena team holds around 25% of the staked ENA (SENA) in its Season 3 farming event, potentially diluting rewards for genuine participants. Their findings, which were detailed in a series of posts on X, revealed that six wallets linked to Ethena Labs received 180 million ENA tokens from a Coinbase Prime Custody address, which had previously received over 3 billion ENA tokens in August, likely intended for Ethena’s core team and foundation.
These wallets appeared on Ethena’s leaderboard, actively farming Sats and accumulating Ethereal (ETRL) rewards while reportedly earning 20% of all points allocated for community members.
Nomad criticized Ethena’s actions, raising concerns about transparency and advising caution when dealing with centralized finance entities. The investigator also noted issues from earlier Ethena farming events, where Seasons 1 and 2 allegedly resulted in financial losses for users.
In response to these allegations, Ethena Labs denied any wrongdoing, asserting that the staked ENA tokens are unlocked foundation tokens eligible for participation. The team has pledged to provide further clarification to address community concerns.
The allegations have attracted considerable attention from the crypto community, with numerous users on the X platform calling for an explanation from the firm regarding the purported internal participation and its impact on staking rewards.
Meanwhile, USDe, Ethena Labs’ synthetic stablecoin, has been gaining traction recently. The trading firm Wintermute announced on October 25 that it will accept the cryptocurrency-backed stablecoin as collateral for various trading activities, including options, credit default swaps, forwards, and spot trading. This move expands Wintermute’s existing collateral offerings, which already include Bitcoin (BTC), Ether (ETH), Solana (SOL), and USD Coin (USDC).
Notably, in late September, the project team introduced a proposal to integrate Ethereal, a DEX exchange, with the protocol to boost the “utility and demand” for USDe.
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