EigenLayer Launches Native Token, Details Airdrop, But Not All Users Happy

EigenLayer Foundation, which runs the EigenLayer platform, a decentralized marketplace that allows Ethereum holders to use their tokens to provide security for crypto applications, has officially introduced its native token through a multi-season stakedrop, with some 15% of tokens allocated to the community.

The announcement of the stakedrop comes after the formation of the Eigenlayer Foundation, signaling a strategic move towards establishing a robust ecosystem around its native token, $EIGEN. With the release of the token, Eigenlayer aims to foster greater engagement among its community members while building a sustainable network for decentralized applications (dApps), according to an announcement on Monday.

The stakedrop, detailed in a recent post by Eigenlayer Foundation, outlines key dates and procedures for participants to claim their $EIGEN tokens. According to the official announcement, the claim date for the stakedrop is set for May 10, with participants directed to the dedicated claim site at http://claims.eigenfoundation.org. The claim window is runs through to September 7, 2024, providing participants with a 120-day window to claim their tokens.

Season 1 of the stakedrop will see an allocation of 5% of the initial EIGEN token supply.

Users disappointed

However, many users who have been restaking on EigenLayer aren't too happy, as firstly, the airdrop is linear, meaning that the amount of ETH that you restake is proportional to the amount of $EIGEN you will be receiving.

Next, the snapshot date for Season 1 was confirmed as March 15, 2024, meaning users who have accumulated Eigen points since that date will not count for Season 1, and only for future rounds. Also, because Phase 1 will prioritize "most restakers & liquid staking token holders," no one that received points for EigenLayer via liquid restaking integrations like Pendle will get an allocation for Phase 1.

Furthermore, during the initial phase, $EIGEN tokens will not be transferable. According to Eigenlayer Foundation, this restriction "allows time for further product development and decentralization with community feedback. It also allows the community time build a shared understanding for the novel EIGEN design during the 'setup period'."

There's also the issue of users in ~30 countries that aren't eligible for the airdrop, including the United States, Canada, China and Russia. And using a VPN to skirt this restriction isn't going to be easy. “To avoid circumvention of our geo-location controls, the organization has implemented proxy and VPN detection and blocking controls, which are designed to prevent Eigen claims by any person detected to be using VPN and similar proxy technologies,” EigenLayer said.

What is EigenLayer?

EigenLayer allows users to "restake" their Ethereum (ETH), essentially locking it up to help secure the network. This process increases the network's capacity and efficiency, paving the way for faster transaction processing and lower fees.

Regular staking involves locking up your crypto assets to support a blockchain network and earn rewards in return. Restaking takes this a step further. Instead of staking your ETH directly, you stake tokens that represent your staked ETH from other platforms like Lido or Rocket Pool. This allows for a more flexible and efficient staking experience.

Since its launch, EigenLayer has grown to become the second largest restaking protocol, with $15.67 billion in total value locked (TVL) by users who have been anticipating an airdrop.

Multi-Factor Dangers of Crypto’s Billion-Dollar “Restaking” Bet

Restaking is drawing significant attention, with platforms like EigenLayer drawing over $3 billion in ETH and token derivatives from speculators, alongside millions from investors chasing early adopter airdrops. However, the resurgence of speculative investment chasing high rewards raises concerns.

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