Ethena Labs, an Ethereum-based artificial greenback ecosystem, is within the information following a report declaring that it not too long ago staked 180 million ENA tokens for its Season 3 crypto-farming occasion, which provided fewer rewards for different stakers. Crypto investigator Nomad alarmed the neighborhood on October 27, alleging that the Ethena crew held about 25 p.c of the general staked ENA (SENA) to be used throughout the occasion to reap Sats earned by actions throughout the Ethena platform.
Alert: Essential Discover for ENA/USDe Holders
The Ethena crew is at the moment utilizing 180M ENA tokens (25% of SENA provide that earns sats) to farm sats in Season 3, successfully diluting different contributors’ rewards. This raises important considerations concerning the crew’s ethics.
A thread
— Nomad (@Nomad02887202) October 27, 2024
Ethena provides an instance the place such a major stake may considerably scale back returns for unusual stakers and therefore claims that utilizing the USDE token demonstrates that the crew is an evil one. As for misconduct, Ethena Labs has been mum about all of it, although they haven’t offered an official assertion.
Nomad’s evaluation adopted the movement of ENA tokens and reportedly related six pocket addresses with Ethena Labs. These wallets had been additionally mentioned to have acquired 180 million ENA tokens from Coinbase Prime Custody in October. This switch got here after the September launch of SENA staking, and each of the wallets have since been featured on Ethena’s Sats farming leaderboard, displaying lively participation within the rewards system.
Ethena sats leaderboard reveals
0xB6dcCA1e6F3aB04B899cBf30cFcE22E6F9272C9F ranks seventeenth with 33.6B sats
0xC4bf1D0e09c400891ed780652b75b93fEE2c704e ranks twentieth with 32.2B sats
0x1cF0Bc14FB1f9d0a3620d99bAA624944634d8AA5 ranks twenty fourth with 28.8B sats…
— Nomad (@Nomad02887202) October 27, 2024
Nomad’s analysis argues that these wallets, possible owned by Ethena Labs, acquired 20% of Ethereal (ETRL) factors, a reward reserved for contributors. Davis’s accusations have created ripples within the crypto house, and lots of customers on X have known as on Ethena Labs to plan an answer.
We’re conscious of questions circulating in Discord and X as as to if buyers or the Ethena crew are incomes Ethereal rewards through sENA utilizing locked tokens.
We want to categorically verify to our neighborhood that completely no locked crew or investor tokens are staked as… pic.twitter.com/v5SxgDwCTp
— Ethena Labs (@ethena_labs) October 28, 2024
Ethena’s Earlier Farming Points Solid Doubt on Reward Practices
Nomad additionally identified issues from different farming incidents that occurred in Ethena Season 1 and Season 2, which reportedly induced a number of customers to lose cash. This historical past, rising with the present accusations, additionally raised doubts and criticisms of the protocol’s reward distribution and neighborhood engagement method.
In response, Ethena has come out to defend itself, arguing that the staked ENA tokens are unlocked basis tokens that had been legally staked. Ethena Labs acknowledged that additional explanations can be made to dismiss the allegations.
Nevertheless, this 12 months, Ethena Labs has partnered with algorithmic buying and selling agency Wintermute, which now takes USDe issued by Ethena as a margin to commerce cryptocurrencies over the Counter. Wintermute shoppers can use USDe to hedge choices, CDS, forwards, and spots, which act as collateral. This partnership, finalized on October twenty fifth, is useful in showcasing Ethena’s development within the digital asset sector even within the wake of the backlash.
Whereas the crypto neighborhood waits for newer developments, Ethena Labs continues to obtain consideration. Due to this fact, they have to reply to those allegations to retain customers’ confidence throughout these attempting occasions.
