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EigenLayer Airdrop: What’s the Controversy About the EIGEN Token?
The ETH EigenLayer restake protocol announced the launch of its long-awaited native token EIGEN on April 29th with somewhat “complicated” tokenomics and airdrops. Although the EigenLayer team appears to be extremely cautious about their token, it has drawn heavy criticism within the crypto community.
Several users discussed on Twitter that the team overcomplicated the launch of the EigenLayer token by adding surreal terms in the white paper and placing limitations on the claiming method. The EigenLayer team has allocated 15% of the token supply to the community, of which 5% will be distributed to existing stakers who have acquired points as early adopters.
The main concern here is the unfair allocation of tokens, of which over 55% is distributed to investors and team members. However, the early stakeholders – who made the protocol a success – only get 5%, which is much less than a standard community allocation.
As if this small allocation wasn’t enough to upset stakeholders, the initial distribution will be non-transferable to them. This essentially means that the tokens cannot be sold in the live markets for a certain period even after making the request. The team claims that it was necessary to impose such a limit to start decentralization among token holders, but by doing so, according to some users, they are essentially controlling the market supply.
Another disappointment is that the protocol has eliminated Airdrop for users located in the United States, Canada, China, and Russia. So all those stakers who received points and reside in these counties would not be able to claim EIGEN tokens. This is truly against the ethos of decentralization that the cryptocurrency industry swears by.
In early February, the StarkNet layer 2 protocol also followed identical methods for token distribution and received strong reactions from community members. The StarkNet team subsequently had to change their allocation and vesting schedules due to massive outflows. This strategy of EigenLayer also shares similarities with that of StarkNet, where investors and the team seem to gain the most benefits.
In response to EigenLayer’s unfair allocation, stakeholders are abandoning the protocol and withdrawing their assets. The current withdrawal queue has reached the highest level and no stakers will enter the protocol from here on out.
However, the Eigen Foundation – the developer entity behind EigenLayer – released a note yesterday and announced an additional 100 EIGEN tokens to all stakers. He also clarified that the lock release period for the team and investors is one year after the tokens allocated to the community become transferable.
The application for EIGEN tokens will be available from May 10th onwards and will remain open until the next 120 days.
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