Ethena token economics change sparks community outrage

Ethena Labs presentation The token economics have now been overhauled, requiring airdrop recipients to lock up at least half of their ENA tokens. This unexpected move confused users and caused an uproar.

According to the new rules, ENA airdrop recipients must lock up at least 50% of the airdropped tokens or bear the risk. You will lose any unvested ENA tokens. The rule went into effect on June 17, a few months after the ENA airdrop in April.

The team said that by enforcing this rule, they want to encourage long-term holders instead of attracting “mercenary capital” – funds used by investors or traders to make quick profits at the expense of the long-term stability of the protocol.

The team pointed out that none of the unvested tokens will be delivered to the organization.

“$ENA lost due to not meeting the above conditions will not be held by the foundation, team, or investors. This is solely to benefit users connected to the ecosystem.” I read your blog post.

The announcement caused the price of ENA to fall 18% to $0.58. n the last 24 hours as of this writing. Among the top 100 coins by market capitalization, it is one of the worst performers of the day.

ENA is the governance token of a DeFi protocol that issues USDe, a synthetic stablecoin that generates a pegged yield at a value of $1. According to the new regulations: ENA airdrop recipients must now keep at least half of their airdropped tokens in an Ethena lock, PT-ENA on Pendle, or Symbiotic Resttake.

This is not the first time that Ethena Labs has been embroiled in controversy. Ethena Labs in February boasted It talked about raising millions of dollars from well-known investors, but this later turned out to be untrue due to inaccurate press releases. This led the team to “honest mistake.”

Users were frustrated by the sudden change in token economics, with many pointing out flaws in the protocol or the team itself.

“Is $ENA for governance? Because I’m not sure we’ve ever seen a ballot proposal before this. First, they changed monthly unlocks to weekly unlocks overnight. So now we have to lock 50% of the unlocks.” a twitter user wrote. “What is the point of governance tokens?”

Another user wrote: story It is entirely mercenary capital.

“Changing the vesting schedule and now forcing 50% to be staked is intended to only keep the value for the team and investors until it is unlocked in 6 months,” the user said.

Meanwhile, one user said that the Ethena team trustworthyHe added that users should always exercise caution when participating in the Ethena ecosystem in the future as the rules can change at any time.

“Forcing vesting airdrop beneficiaries to become ENA holders undermines the credibility of all future ENA airdrops and actually undermines trust in the Ethena team.” DeFi educator John Galt tweeted: