Learn more about the Colend scam

The accusations surrounding a "scam" in Colend (also stylized as cLEND or Colend.xyz), the primary native lending and borrowing protocol on the Core blockchain (CoreDAO), stem primarily from community outrage in late 2025 and early 2026. Colend is officially positioned as a decentralized BTCFi (Bitcoin Finance) lending platform, allowing users to supply assets (like CORE, stCORE, BTC variants, stablecoins) to earn yield and borrow against collateral in a non-custodial way. It was promoted heavily by CoreDAO as a key DeFi primitive for the ecosystem.

Core AllegationsThe main claims revolve around alleged manipulation and exploitation of the protocol during a period of high volatility and price drops in CORE (the native token), particularly around November 2025 onward:

• Massive CORE Deposits from Core-Controlled Addresses — Addresses reportedly linked to the Core Foundation / treasury (or "CoreDAO governance") deposited very large amounts of CORE and stCORE (hundreds of millions of tokens, estimated at 10–25% of circulating supply or "community-allocated" portions) as collateral into Colend. This was allegedly done using treasury / community funds.
• Borrowing Out All Stablecoins — These positions then borrowed nearly all available stablecoins (USDT, USDC) and other liquid assets from the pools, pushing utilization rates to ~100%. This locked up depositors' stablecoins, making withdrawals impossible or severely restricted.
• Parameter Changes to Avoid Liquidation — Critics allege that the protocol owner (often referred to as StanColend or Bryan Careme in accusations) — in coordination with Core entities — adjusted key parameters (e.g., utilization curves, borrow rates, supply limits for CORE, LTV thresholds) multiple times. This reportedly:
  • Reduced borrow interest rates dramatically (from >100% APY down to ~15–17%).
  • Lowered yields for stablecoin suppliers (from highs like 70–80% down to much lower levels).
  • Increased CORE supply caps to prevent or delay liquidations of the large treasury positions during CORE price drops.
• "Soft Rug" or Extortion Mechanism — With pools drained of stablecoins and high utilization persisting, depositors were stuck. A P2P market (p2p.colend.xyz) was introduced where stuck USDT/USDC could be sold back at steep discounts (e.g., $0.36–$0.70 per $1). Accusers call this coercive — essentially forcing victims to sell at a loss to "unlock" funds, while large borrowers (allegedly Core-linked) pay minimal interest without repaying principal.
• Lack of Repayment and Transparency — Borrowed stablecoins were not repaid promptly. Community posts claim this effectively "stole" $10–15 million+ in stablecoin liquidity from retail depositors to protect treasury positions. No full public audit trail or reimbursement plan has been provided in response to demands.

Key Sources of Accusations

• Active X (Twitter) users repeatedly label it a "real-time scam," "blackmail," or "theft by Core Foundation," linking to:
  • Medium/Substack/blog posts detailing on-chain analysis.
  • A dedicated forum thread on forum.coredao.org demanding transparency about ~200M CORE movements and large loan pledges.
• Complaints describe it as a "reputational blow" to CoreDAO, with calls for justice, investigations, or boycotts.

Official / Counter Side

• Colend's official site (colend.xyz) and X (
  @colend_xyz
  ) continue to operate, promoting features like "smarter yields," BTCFi loans, and grants. They state the protocol runs "according to its intended design" with "no unrecoverable debt."
• CoreDAO promotions (e.g., guides on coredao.org) highlight Colend as secure and integral to BTC staking/yield.

Current Status (as of March 2026)

• TVL in Colend has reportedly collapsed significantly from peaks (earlier reports of hundreds of millions to much lower).
• Community frustration persists on X, forums, and groups, with repeated tags of
  @Coredao_Org
  and
  @colend_xyz
  demanding answers — but little to no direct official response on the specific claims.
• The protocol remains live, but trust is heavily damaged among vocal users who view it as centralized control masquerading as DeFi.

If you've been affected, gather your transaction proofs, check CoreScan for addresses involved, post in the official forum thread for visibility, and consider consulting crypto recovery/legal experts or regulators. Always DYOR and be cautious with DeFi lending protocols, especially during volatility.