Ethena Labs, an Ethereum-based synthetic dollar protocol, is under fire for allegedly misusing 180 million Ethena tokens (ENA) during a recent farming event.
These accusations came from a crypto investigator named Nomad, who claims that Ethena’s team owns about 25% of all the staked ENA in their current Season 3 farming project.
Nomad warned that this could “significantly dilute the rewards” for honest users, especially those holding Ethena USDe (USDE) tokens.
The investigation highlights six wallets linked to Ethena Labs, which supposedly received the 180 million ENA tokens from a Coinbase Prime Custody account. These wallets have been earning rewards for farming Sats.
After launching the SENA staking program in September, these wallets reportedly received 20% of all Ethereal (ETRL) points meant for community members. The accumulated rewards from these wallets include both Sats and ETRL points.
Nomad also raised concerns about how Ethena manages user funds, asking, “No one really knows how much funding revenue and staking revenue Ethena is generating from the $2.6 billion user fund.”
In response, Ethena stated that the staked ENA tokens in question are unlocked foundation tokens that meet the criteria for participation
However, they have not yet addressed how this might affect the community, leaving many ENA token holders feeling uneasy. Nomad also pointed out issues with Ethena’s past staking events, noting that many users lost money during Seasons 1 and 2.
Also Read: Ethena Labs Proposes SOL for a Stronger USDe Foundation
