A recent report by Bubblemaps has brought attention to the token launch of Edel Finance, a decentralized finance (DeFi) project focused on tokenized assets, alleging that wallets linked to the project acquired a significant portion of the EDEL token supply through a strategy resembling "sniping".
According to Bubblemaps, approximately 160 wallets, funded via Binance and MEXC, secured 30% of the EDEL token supply during its launch on November 12. This acquisition, valued at $11 million, has ignited debate regarding transparency and fairness within the DeFi space. Sniping involves using bots to automate trades, swiftly acquiring tokens at launch, often before other investors have a chance.
Bubblemaps' analysis indicates the wallets were funded with Ether (ETH) and structured through multiple layers of new wallets before trades were executed. Furthermore, half of the acquired tokens were distributed among 100 secondary wallets, all linked to MEXC, which Bubblemaps describes as a "clear link between the team and the snipers". The analytics firm claims the token contract's code explicitly included these secondary wallets, suggesting a deliberate attempt to obscure the activity.
Edel Finance's co-founder has defended the activity, asserting that it aligns with the project's token rollout plans. The EDEL token underpins a lending protocol for tokenized stocks and real-world assets (RWAs), a model where users can earn yield by renting out tokenized equities. This concept is gaining traction as other platforms expand their tokenized asset offerings.
However, the controversy has impacted the EDEL token's market capitalization, which has declined by 62% over the past week to $14.9 million, according to CoinMarketCap. This volatility underscores the challenges new DeFi projects face, especially those bridging traditional finance and blockchain technology. Trust in the project's governance, a critical factor for DeFi platforms, could be eroded by these recent events.
The situation raises important questions about fairness and transparency in DeFi token launches. While Edel Finance defends the activity as part of its rollout strategy, the coordinated nature of the wallet activity and the explicit inclusion of secondary wallets in the token contract have fueled concerns. The use of "sniping" tactics, even if not explicitly prohibited, can disadvantage ordinary investors and create an uneven playing field.
As the DeFi space matures, greater scrutiny is being applied to token distribution mechanisms. Projects are under pressure to demonstrate fairness and transparency to build trust and attract a broader user base. The Edel Finance case serves as a reminder of the importance of clear communication, robust governance, and equitable token distribution strategies in the DeFi ecosystem.
