Jack Paul 
Cap Labs, the company behind the stablecoin cUSD, is dealing with a significant backlash after reversing its long-planned “stabledrop” program. The project, which describes itself as a platform for USD yield, private credit, and financial guarantees, announced on Friday that it would reduce the airdrop from the promised $12 million to just $4.2 million.
Community outrage and withdrawal surge
The change didn’t sit well with users. Many called the team “scammers” and “shameless” on social media. The situation escalated when some community members linked a wallet that had purchased a large amount of Pendle yield tokens (YTs) to Cap founder Benjamin Peillard’s previous project, QiDAO. This sparked accusations of insider trading and self-dealing.
On-chain data shows the damage was real. Within days, approximately $23 million flowed out of the protocol, dropping its total value locked from $80 million to around $57 million. Peillard was quick to reassure users that remaining liquidity was still intact and that the loans backing the stablecoin were sound.
Founder addresses accusations
In a post on X on Monday, Peillard apologized for the “mistake” of promising $12 million based on an unconfirmed valuation of $250 million. He reiterated that the new plan aimed to ensure “nobody would take a loss, but at the same time, nobody would make a profit.” The focus shifted to making whole those who lost money holding Pendle YTs.
Peillard also tried to distance himself from the wallet tied to the insider trading claims. He said the address belonged to an “old colleague who is not affiliated with Cap… [but] is still a close friend.” However, skeptics pointed out that the same wallet once minted the ENS handle megaben.eth before transferring it to an address that later minted caplabs.eth. Another user questioned the timing of the wallet’s YT accumulation, which would have brought “substantial profits” under the original criteria.
Stablecoin struggles
Cap’s stablecoin cUSD has seen better days. It peaked at over $400 million near the end of January, just before the stabledrop was originally announced. Now, it sits at roughly $62 million. The market’s trust, it seems, will take time to rebuild.