ETHFI, the governance token of the Ether.fi staking protocol, has seen a significant drop in price since its debut on Binance on Monday, March 18. After initially trading at $4.13, the token lost more than 25% of its value, raising concerns among investors.
However, recent activity on the network has fueled speculation of further sales, potentially threatening the stability of the token and its ability to maintain the $3 mark. In particular, blockchain analytics firm Nansen has identified interesting behavior involving Arrington XRP Capital on the Ether.fi platform, highlighting some significant transactions.
Price Concerns for ETHFI
In a recent publish On social media site X (formerly Twitter), Nansen’s analysis reveals interesting activity involving venture capital fund Arrington XRP Capital on the Ether.fi platform.
According to blockchain analytics firm, Arrington XRP Capital has minted 5,000 units of eETH, the natively remodeled liquid of Ether.fi. staking token. Notably, these eETH tokens were distributed to ten different wallets, each containing 500 units.
After the distribution, Arrington XRP Capital claimed a total of 200,498 ETHFI tokens across the ten wallets. The funds were transferred to another address, consolidating the acquired ETHFI tokens.
In the final stage of the observed activity, Arrington XRP Capital sent the entire balance of ETHFI tokens to the Binance cryptocurrency exchange, potentially for selling purposes, which could put even more pressure on ETHFI.
However, the Ether.fi team has responded to speculation surrounding the network moves made by Arrington XRP Capital.
Ether.fi Clarify
According to for Ether.fi, Arrington XRP Capital has been a consistent investor in the platform and has provided significant support since its inception. The statement further noted that as pioneers and active participants, the Arrington team has actively staked its assets on Ether.fi, contributing to the platform’s growth.
O multi-portfolio distribution observed in recent activity did not surprise Ether.fi, as they would have been informed of this approach in advance.
Ether.fi stated that splitting assets into multiple wallets did not provide additional benefits or change the outcome of the distribution. The protocol claimed that consolidating the assets into a single portfolio would have produced the same results.
The protocol claimed that these assets are part of its liquid funds, which are “actively traded”. The decision to transfer the assets to the Binance cryptocurrency exchange was driven by the nature of its trading activities and liquidity needs, the Ether.fi team concluded.
Arrington Capital addresses speculation
The Arrington Capital team also clarified the context via social media. publish. They clarified that they were long-term investors, staking over $50 million worth of ETH since February 2023.
The company claimed that the recent sale of a “small percentage” of its initial airdrop tokens totaled less than $700,000, reportedly representing just 0.1% of the day’s trading volume.
Ultimately, Arrington Capital emphasized that its actions were not a “Sybil attack” and did not exploit the protocol’s distribution methodology. They ended their response by stating that airdrop the distribution follows a linear model that is “not affected” by the distribution across multiple portfolios.
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