 
 
Crypto sleuth TradFiWhale, renowned for his insightful predictions and relentless pursuit of vulnerabilities within cryptocurrency projects, has once again made waves in the digital asset community.
Following his previous exposés, which included forecasting the collapse of the Terra ecosystem and its UST stablecoin in 2022, the sleuth has uncovered another significant discovery concerning the Ethereum-based synthetic stablecoin, USDe, developed by Ethena Labs.
Raising concerns about what he perceives as structural weaknesses within the USDe stablecoin, TradFiWhale took to social media platforms to shed light on the issue. Through a series of posts over the past week, he questioned the integrity of Ethena Labs’ bug bounty program, alleging undisclosed risks that could threaten the stability of the cryptocurrency.
In a March 29 thread on X, the sleuth levied accusations against Ethena Labs, suggesting manipulative and deceptive marketing tactics within the company’s documentation. He highlighted instances where Ethena purportedly misrepresented USDe as a stablecoin pegged to the USD, failing to acknowledge its synthetic nature and the associated risks. Additionally, he pointed out discrepancies in Ethena’s risk disclosure section, which allegedly omitted significant risks associated with their investment product.
Criticism was also directed at industry figures like former BitMEX CEO Arthur Hayes, who “endorsed USDe” without adequately addressing its vulnerabilities.
 
“Your favorite influencer keeps shilling you Ethena and you see $1bn TVL. It must be safe, right? Sorry, Arthur, it’s not. Don’t forget, UST hit $18bn. TVL is not a good measure of safety. Influencers shilled that as they’re shilling this now.” He added.
Notably, his intention to allocate a substantial reward for discovering the vulnerability further amplified the pundit’s concerns. Recently, the sleuth proposed a reward of $500,000 for divulging the stablecoin’s vulnerability before increasing this sum to $1 million. According to him, these funds would be donated to other sleuths who have helped uncover Ethena’s stablecoin vulnerabilities.
That said, amid this exposé, the pundit has expressed frustration over what he perceives as attempts to silence criticism from Ethena Labs founder Leptokurtic and other project backers.
“They’re paying me to stop posting crap about Ethena. How do they run a bug bounty program after launching their token, allowing insiders to get paid for participating in a campaign and insure against criminals without publicly disclosing significant risks that are not disclosed in the documents?” he wrote on Tuesday, April 2.
Rolled out in February of this year, USDe, Athena’s synthetic dollar, promises censorship resistance, scalability, and stability by implementing delta hedging on Ethereum collateral. The reliability of the USDe peg remains upheld through the utilization of delta-hedging derivatives against the protocol’s held collateral. As of the latest data from CoinMarketCap, USDe has a market capitalization of $1.9 billion, with its volume increasing by 1,234% in the past 24 hours.