The Ethena team is facing a "credibility" crisis. Is using 180 million ENA to earn Sats intended to dilute rewards?

Original author: Nomad, community user

Original translation: Felix, PANews

BlockBeats Note: Late on October 28, Ethena Labs responded to recent community doubts about sENA rewards, saying that “no unlocked team or investor tokens were staked as sENA for rewards” and announced that “a section will be added to the user interface this week to clarify total sENA eligibility for future airdrops, which does not include unallocated sENA in the Liquifi contract.”

Ethena, the Ethereum stablecoin synthetic dollar project, has not yet gotten rid of the doubts about being the “next LUNA” and has recently suffered another “integrity crisis”. A community user posted on the X platform questioning the use of 180 million ENA to earn Sats in Season 3, diluting the rewards of other participants. The following are the details of the content.

The Ethena team is using 180 million ENA tokens (25% of the SENA supply to earn Sats) for Sats liquidity mining in Season 3, which actually dilutes the rewards of other participants. This move has caused great concern about the ethics of the team.

Evidence timeline:

August 22: Coinbase announced that its Prime service will become the main custodian of ENA tokens for Ethena Labs and Foundation.

August 23: The Coinbase Prime custodian address received more than 3 billion ENA tokens, which exceeded the total circulation of ENA at the time according to Ethena's vesting plan. There is reason to believe that this is the Coinbase Prime custodian address for ENA tokens locked by the Ethena Labs core team and the Ethena Foundation.

October 3: When SENA staking was launched via the S2 airdrop, the Coinbase Prime Custody address distributed 180 million ENA tokens to six wallets:

· Day 1: 2 transfers (30 million and 35 million ENA)

· Next few days: 4 transfers (35 million, 30 million, 25 million, 25 million ENA)

The Ethena sats leaderboard shows:

These SENA can not only earn Sats, but also Ethereal points (the DEX in partnership with Ethena will be launched at the end of 2024). The figure below shows that the Ethena team's SENA has currently accumulated 20% of the total Ethereal points.

This is not the first time these suspicious addresses have raised questions. In Ethena's first community call, this was the most voted issue, but the Ethena team chose to ignore it completely, which fully speaks to the team's moral character and attitude.

The Ethena team has always had questionable ethics and has previously changed the attribution rules at will. Users who participated in S1 mining may remember that the Ethena team forced them to stake 50% of the vested tokens halfway through the vesting schedule. Users who participated in S2 mining suffered losses due to the 30-day average USDe holding rule that was implemented at the last minute. S2 YT holders almost suffered huge losses when they were about to be subject to the same average holding rule.

As a CeDeFi project, it is largely a black box in nature. Users have no choice but to believe the numbers released by the Ethena team. No one really knows how much yield and staking income Ethena has received from the $2.6 billion user fund, or whether all of the income has been passed to SUSDe holders. While it is critical for a protocol like Ethena to establish a solid trust with users, the team's past performance shows that it runs counter to this concept.

Related reading: 《DeFi "Old King" Andre Cronje's long article questioning Ethena (USDe): The next UST? 》

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