Cap Labs, issuer of cUSD, is in damage control mode following an unpopular u-turn on its long-anticipated “stabledrop” program.
Announced on Friday, the changes were met with harsh criticism, substantial withdrawals and accusations of insider trading.
Cap’s founder Benjamin Peillard has been forced to defend the firm’s actions, and attempt to distance himself from a wallet which has been accused of receiving preferential treatment.
The project bills itself as a “three-sided platform for USD yield, private credit, and financial guarantees.” It currently offers almost 5% on USDC deposits to back its stablecoin cUSD.
However, its promise of “verifiable outcomes” apparently didn’t apply to the $12 million set aside in February for the “first-ever stablecoin airdrop” for early users.
U-turn
Friday’s announcement clarified that, rather than the $12 million promised, it would now be just $4.2 million. Instead of rewarding early cUSD users and liquidity providers, it would focus on making whole those who have lost money holding Pendle yield tokens (YTs).
The news didn’t go down well. Respondents didn’t pull any punches, calling the team “scammers” and “shameless.”
Some went further, however, linking the address of one of the largest purchasers of YTs to Peillard’s previous project QiDAO’s “Working capital account 2.”
The backlash was felt on-chain, too.
So far, $23m of withdrawals have occurred ($80m -> $57m). There is still $11m of liquidity instantly available left though the steakhouse and gauntlet vaults.
again, there is nothing structurally wrong with the loans or backing. https://t.co/j23YjnK9C1 pic.twitter.com/d4sM3R8Wrl
— ilemi (@andrewhong5297) July 13, 2026
In a post to X 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 also attempts to debunk the self-dealing accusations, stating that the wallet belongs to an “old colleague who is not affiliated with Cap… [but] is still a close friend.”
Many remain unconvinced, however, with the address having minted the ENS handle megaben.eth two years ago, before transferring it to another address which then minted caplabs.eth.
Another user also questioned the timing of the address’ YT accumulation, which would have made “substantial profits” under the initial stabledrop criteria, before it was announced.
Cap’s stablecoin cUSD reached a peak of over $400 million towards the end of January, just before the original stabledrop was announced. It currently sits at around $62 million.
