Popular Ethereum-based synthetic dollar protocol, Ethena Labs has responded to allegations of facilitating crypto farming events using 180 million of its native tokens. In a post on its official X page, the protocol on Monday revealed that it is aware of the growing speculations.
Through the post, Ethena Labs denied its involvement in any farming event. More so, the protocol explained that it didn’t lock any investors’ tokens in any earning rewards including Ethereal.
Additionally, the firm stated that the movement of funds from its wallets is due to the vesting schedule outlined in the token’s distribution model. The team revealed that the wallet contains some unlocked foundation tokens.
The protocol further added that the foundation confirmed that it won’t use the tokens for any farming activity including Ethereal. Meanwhile, $ENA, the native token of the protocol reacted negatively to the news, extending its price dip.
According to CoinGecko, Ethena is presently changing hands for $0.03343, which reflects a 5.6% dip in the last 24 hours.
How Nomad Highlighted Some WrongDoings by Ethena Labs
Recall that on October 27, 2024, crypto investigator Nomad accused the Ethena team of owning 25% of the total token staked in its Season 3 farming event. Don’t forget that the tokens are used for farming Sats as a reward to users for carrying out different activities in the Ethena ecosystem.
The expert went on to question the ethics of the team, raising concern that the move would significantly affect the rewards of the real participants most especially Ethens/Ethena USDe (USDE) tokens.
In his post, the expert disclosed that the Coinbase Prime Custody address received over 3 billion ENA tokens in August. Nomad alleged that the tokens were potentially locked $ENA belonging to the core team and the Ethena Foundation.
Last month, about six crypto wallets associated with Ethena received 180 million $ENA tokens from the Coinbase Prime Custody address after the launching of SENA in September. As revealed, all the wallets featured on the Ethena leaderboard for Sats farming.
Additionally, these alleged wallets also received Ethereal (ETRL) rewards. Nomad accused Ethena of staking 180 million, receiving 20% of all Ethereal points committed to community members.
Meanwhile, the blockchain security expert emphasized the importance of trust when interacting with centralized finance entities. Backing his claims, Nomad highlighted some shortcomings in the Season 1 and 3 farming events hosted by Ethena.
Nomad stated that the events had some financial implications on participants.