Cap Labs, the issuer of the cUSD stablecoin, is facing a crisis of trust after abruptly scaling back its long-promised “stabledrop” program. The change, announced on Friday, sparked immediate criticism, substantial withdrawals, and accusations of insider trading. Founder Benjamin Peillard has been forced to defend the company’s actions, distancing himself from a wallet some say received preferential treatment.
U-turn on airdrop promise
The project calls itself a “three-sided platform for USD yield, private credit, and financial guarantees.” It offers nearly 5% on USDC deposits to back its stablecoin cUSD. But its promise of “verifiable outcomes” didn’t apply, apparently, to the $12 million set aside in February for what was described as the first-ever stablecoin airdrop for early users.
Friday’s announcement changed the terms dramatically. Instead of $12 million, the program would now distribute only $4.2 million. And instead of rewarding early cUSD users and liquidity providers, the focus shifted to making whole those who lost money holding Pendle yield tokens (YTs). The news didn’t sit well. Many respondents called the team “scammers” and “shameless.”
Self-dealing accusations emerge
Some went further. They linked a wallet that had purchased large amounts of YTs to Peillard’s previous project, QiDAO, specifically to its “Working capital account 2.” The backlash was felt on-chain, too. So far, cUSD has seen $23 million in withdrawals, dropping from $80 million to $57 million. Still, according to Peillard, “there is nothing structurally wrong with the loans or backing.”
In a post on Monday, Peillard apologized for the “mistake” of promising $12 million based on an unconfirmed valuation of $250 million. He reiterated the decision that “nobody would take a loss, but at the same time, nobody would make a profit.” The post tried to debunk self-dealing claims, stating the wallet belongs to an “old colleague who is not affiliated with Cap… [but] is still a close friend.”
Questions remain
Many remain unconvinced. The same address once minted the ENS handle megaben.eth two years ago before transferring it to another address, which then minted caplabs.eth. Another user questioned the timing of the address’s YT accumulation, which would have made “substantial profits” under the initial stabledrop criteria — before the change was announced.
Cap’s cUSD stablecoin had peaked at over $400 million in late January, just before the original stabledrop was announced. Now, it sits at around $62 million. Peillard may have apologized, but trust is harder to rebuild than a balance sheet.
