Concerns are mounting over unusual activity surrounding the token launch of Edel Finance, a lending protocol focused on tokenized stocks and real-world assets (RWAs).
Blockchain analytics platform Bubblemaps claimed in a Tuesday X post that a cluster of about 160 wallets accumulated 30% of the EDEL token supply, worth $11 million, during the launch earlier this month. The platform alleged the wallets were linked and funded in a coordinated fashion immediately before trading opened.
“Edel Finance sniped 30% of $EDEL. Then tried to hide it behind a maze of wallets and liquidity positions,” said Bubblemaps. “Just hours before $EDEL launched, ~60 wallets were funded from Binance […] Together, they got 30% of the supply – now worth $11M.”
In crypto slang, sniping refers to employing crypto trading bots to automatically purchase new token supply as soon as the tokens become publicly available. Snipers aim to get in before the general public to buy at lower prices.
The wallets were all funded with Ether (ETH) around the same time, which was sent through a “layer of fresh wallets” before buying up the token supply through the final wallet layer, Bubblemaps claimed.
Each wallet received 50% of the EDEL they sniped, while the remaining 50% was dispersed among about 100 secondary wallets, all of which were reportedly funded through the MEXC exchange.
“The list of all 100 secondary wallets is included directly in the token contract creation code,” creating a “clear link between the team and the snipers,” Bubblemaps said.
Cointelegraph was unable to independently verify the wallet cluster that acquired 30% of the token supply.
EDEL, which launched Nov. 12, has a market capitalization of about $14.9 million but has fallen 62% over the past week, according to CoinMarketCap.
Edel Finance is a decentralized lending protocol aiming to bring traditional stocks into onchain lending. The team is backed by former employees from State Street, JPMorgan and Airbnb, according to its X page.
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Edel co-founder denies sniping allegations
Responding to the findings, James Sherborne, the co-founder of Edel Finance, said that the team planned to acquire 60% of the token supply, which was subsequently locked into token vesting contracts.
“Cool chart – but not accurate…we actually acquired ~60% of supply and placed the tokens into a vesting contract, as per the docs,” wrote Sherborne, in a Tuesday X response to Bubblemaps.
Based on the Edel Finance tokenomics documents shared by Sherborne, only 12.7% of the token supply was allocated to the team, through a 36-month vesting schedule comprised of six-month cliff unlocks.
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Despite the quick team response, Bubblemaps called the explanation a “Hayden Davis defense,” referring to the controversial co-creator of the Official Melania Meme (MELANIA), as well as the Libra (LIBRA) and Wolf of Wall Street-themed Wolf (WOLF) memecoins.
Notably, Davies launched the Wolf of Wall Street-themed memecoin with an insider supply of over 80%, which led to the token crashing by 99% within two days.
“I sniped my own token without telling anyone, but trust me it’s fine. If you were genuine, you’d have allocated the supply upfront based on your tokenomics,” replied Bubblemaps to the Edel co-founder.
Moreover, the 50% EDEL token supply in the vesting schedule originated from the token deployer and has “nothing to do with the snipe,” Bubblemaps added.
Cointelegraph has contacted Edel Finance for comment.
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