ENA declines as Ethena Labs clears community doubts on staking locked tokens

Ethena Labs (ENA) released a post on Monday stating they did not use locked ENA tokens to farm sats rewards on the Ethereal decentralized exchange (DEX) as community members suspected. However, ENA continued its decline, dropping nearly 4% in the past 24 hours.

Ethena Labs clears allegations following wallet activity, ENA price declines

In an X post on Monday, synthetic dollar protocol Ethena Labs denounced claims that it had used 180 million ENA tokens to farm staking rewards from Ethereal. According to the post, no locked tokens belonging to investors or team members were held as staked Ethena (sENA) to earn rewards.

The team also noted that the ENA tokens moved from key suspicious wallets belong to the Ethena Foundation. None of those tokens were locked, as Ethena Labs claims to have moved them based on their unlock schedule.

Additionally, the foundation confirmed that the tokens will not be eligible for staking rewards or other Ethereal benefits.

The accusations against Ethena Labs began after crypto investigator Nomad released a thread on social media site X alleging that the team held 25% of sENA tokens in the latest sats farming season.

Nomad revealed that suspicious Coinbase Prime Custody addresses received over 3 billion ENA tokens in August, likely designated as locked tokens for the Ethena Labs team. 

He further suggested that six crypto wallets linked to Ethena received 180 million ENA tokens from these custody addresses in October following the sENA staking launch in September.

These wallets have since appeared on the Ethena leaderboard for sats farming, raising questions about the implications for reward distribution among participants.

Ethena Labs has also been subject to criticism following the displeasure of its community members after the conclusion of its previous airdrop season.

However, the team mentioned that they would include a new section to their platform's UI. This will reveal the total sENA that are eligible for future airdrops to users, excluding tokens locked in Liquify contracts.

Meanwhile, Ethena's ENA token is down nearly 4% on the day, likely fueled by fears stirred by community members on the team's transparency.