Ethena Labs Denies Allegations of Unfair Staking

Ethena Labs, the Ethereum-based synthetic dollar protocol, has firmly refuted recent claims that it used 180 million ENA tokens in one of its crypto-farming events.

On 27 October, crypto investigator Nomad alleged that Ethena held 25% of the total staked ENA (SENA) in its Season 3 farming event, where users earn Sats for participation within the Ethena ecosystem.

The allegations sparked a wave of debate in the crypto community, raising concerns about Ethena's transparency and governance.

Following Ethena's official statements and clarifications about the token distribution, Nomad retracted his claims.

Founder Guy Young confirmed that the tokens in question were unlocked in line with the vesting schedule outlined in Ethenas original distribution roadmap.

Ethena further clarified that these tokens, owned by the Ethena Foundation, are ineligible for airdrops or rewards from Ethereal.

This confirmation was shared publicly on Discord last week, with all ENA tokens in those wallets marked as unlocked.

Young noted:

“Nomad has since recanted their accusations and acknowledged that their concerns were unfounded. We would like to reiterate that absolutely no locked team or investor tokens are staked as sENA or are earning any rewards.”

To enhance transparency, Ethena plans to update its user interface this week, adding a section that details the total sENA eligible for future airdrops while excluding any undistributed sENA held in Liquifi contracts.

The Ethena-linked Wallets in Question

Nomad recently reported that a Coinbase Prime Custody address received over 3 billion ENA tokens in August, believed to be locked assets for Ethena Labs' core team and its foundation.

In October, six wallets associated with Ethena were transferred 180 million ENA tokens from this address following the September launch of SENA staking.

These wallets, featured on the Ethena leaderboard, actively participated in Sats farming and received Ethereal (ETRL) rewards, allegedly accruing 20% of the community’s total Ethereal points—raising community concerns over possible favoritism.

Nomad's findings have reignited questions about trust in centralised finance protocols.

Nomad stated:

“No one really knows how much funding revenue and staking revenue Ethena is generating from the $2.6 billion user fund or if it’s streaming all revenue to SUSDe holders.”

He noted issues in Ethena's previous Seasons 1 and 2 farming events, where some users faced financial losses due to unexplained anomalies, leaving a history that has made community members cautious about fairness at Ethena Labs.

In response, Ethena stated that the staked tokens belong to the foundation, granting them eligibility for participation in Sats farming and rewards.

While Ethena plans to address these concerns in more detail, many ENA token holders remain anxious, looking for transparency on how this structure might impact the community going forward.

ENA Price Dipped 6% But Has Since Rebounded

Ethena Labs recently faced scrutiny after revelations surfaced about its use of 180 million ENA tokens in a crypto farming event.

The news immediately impacted ENA’s market value, causing a dip of over 6% to around $0.33. After clarification from the team, it has since rebounded.

It is currently at $0.3742, a 6.42% increase in the last 24 hours, according to CoinMarketCap.