Eigenlayer, the pioneering Ethereum restaking protocol, has found itself at the center of controversy following the announcement of its EIGEN token airdrop.
The airdrop, which was intended to reward early users and contributors, has instead sparked a backlash from the community due to its complex distribution plan and the exclusion of certain groups of users.
TLDR
Eigenlayer’s airdrop of its new EIGEN token has stirred controversy among users due to its complex distribution plan and exclusion of certain groups.
Users have withdrawn about 150,000 ETH (approximately $457 million) from the platform in response to the airdrop announcement.
The airdrop excludes residents of the U.S., Canada, China, and Russia, as well as users who interacted with the system via a VPN, leading to criticism from the community.
The tokens will initially be non-transferable, and a significant portion of the tokens are allocated to investors and early contributors, raising concerns about potential sell-offs once the tokens become transferable.
The controversial airdrop has led to a surge in withdrawal requests, with over 12,412 queued withdrawals in the past three days, potentially affecting Eigenlayer’s TVL.
According to the Eigen Foundation’s announcement on Monday, 15% of the initial 1.67 billion EIGEN tokens will be set aside for the community, with the first 5% being airdropped to early users who accrued “points” on the platform.
While this could potentially translate to substantial rewards for some users, many have expressed dissatisfaction with the airdrop’s terms.
One of the main points of contention is the fact that the tokens will initially be non-transferable, essentially rendering the reward worthless in the short term.
30% of the tokens are allocated to Eigen Labs investors, and another 25% are earmarked for “early contributors.” This distribution has raised concerns that a significant portion of the tokens may be sold off once they become transferable, potentially impacting the token’s value.
The airdrop has also drawn criticism for excluding residents of the United States, Canada, China, and Russia, as well as users who interacted with the system via a VPN.
This decision has been met with frustration, as these users were not barred from interacting with the platform but are now being excluded from the reward.
In response to the controversial airdrop announcement, users have withdrawn approximately 150,000 ETH (worth around $457 million) from the platform.
Eigenlayer has seen a surge in withdrawal requests, with over 12,412 queued withdrawals in the past three days alone. This mass exodus of funds could potentially impact Eigenlayer’s total value locked (TVL) in the coming weeks.
The controversy surrounding Eigenlayer’s airdrop has also led to speculation that rival restaking protocols, such as Karak, may benefit from the discontent among Eigenlayer users. Karak has seen a 20.5% increase in its TVL over the past week, while Eigenlayer’s TVL has fallen by 4%.
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