Ethena Team Faces 'Integrity' Crisis: Using 180 Million ENA to Earn Sats—An Attempt to Dilute Rewards?
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Ethena Team Faces 'Integrity' Crisis: Using 180 Million ENA to Earn Sats—An Attempt to Dilute Rewards?
Has Ethereum stablecoin synthetic dollar project Ethena committed prior offenses?
Navigating Web3 tides with focused insightsAuthor: Nomad
Translation: Felix, PANews
Ethena, Ethereum's stablecoin synthetic dollar project, has yet to shake off accusations of being the "next LUNA," and now faces a fresh "credibility crisis." A community user recently posted on X questioning Ethena’s use of 180 million ENA tokens to earn Sats during Season 3, thereby diluting rewards for other participants. Below are the details.
The Ethena team is using 180 million ENA tokens—representing 25% of the total SENA supply—to farm Sats in Season 3 liquidity mining, effectively diluting rewards for other users. This move has raised serious ethical concerns about the team.
Timeline of Evidence:
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August 22: Coinbase announced its Prime service would become the primary custodian for ENA tokens held by Ethena Labs and the Ethena Foundation.
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August 23: The Coinbase Prime custody address received over 3 billion ENA tokens—more than the total circulating supply of ENA at the time—according to Ethena’s vesting schedule. It is reasonable to believe this is the Coinbase Prime custody address holding locked ENA tokens for Ethena Labs’ core team and the Ethena Foundation.
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October 3: When SENA staking launched via the S2 airdrop, the Coinbase Prime Custody address distributed 180 million ENA tokens across six wallets:
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Day One: Two transfers (30 million and 35 million ENA)
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Following days: Four transfers (35 million, 30 million, 25 million, and 25 million ENA)
Ethena Sats Leaderboard Shows:
These SENA holdings not only earn Sats but also Ethereal points (from a DEX partnership launching by end of 2024). The image below shows that Ethena team’s SENA holdings have already accumulated 20% of total Ethereal points.
These questionable addresses are not new to scrutiny. During Ethena’s first community call, this was the most-voted question, yet the Ethena team chose to completely ignore it—a telling sign of their ethics and attitude.
Ethena team’s integrity has long been questionable. They previously changed vesting rules arbitrarily. Users who participated in S1 mining may recall being forced by the Ethena team to stake 50% of their vested tokens midway through the vesting schedule. S2 miners suffered losses due to a last-minute rule requiring a 30-day average USDe holding. S2 YT holders narrowly avoided major losses when a similar average-holding rule was nearly imposed at the last minute.
As a CeDeFi project, Ethena operates largely as a black box. Users have no choice but to trust the numbers released by the Ethena team. No one truly knows how much yield or staking revenue Ethena has generated from its $2.6 billion in user funds, or whether all income is actually passed on to SUSDe holders. While building strong trust with users is crucial for a protocol like Ethena, the team’s past behavior clearly contradicts this principle.
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