This article comes to you with the generous support of Xtreme.game. Discover the excitement and rewards that await you at Xtreme.game with a 100% deposit bonus!Crypto Community's Verdict on EigenLayer's Airdrop StrategyFollowing a wave of anticipation, EigenLayer's announcement on April 29, 2024, regarding the distribution of 15% of its 1.67 billion EIGEN tokens through a "stakedrop" stirred varied reactions among users. Source: EigenLayer's blog post.Initially earmarked for Season One participants, the decision to make just 5% of the EIGEN tokens available—and with restrictions on their transferability until a future date—has not been well-received, fueling discontent within the community. Honestly the linear approach is fucking stupid. Basically makes 1000-2000 Eigen stakers happy at the expense of 100k who will get peanuts.Reality is those Eigen whales don’t give a fuck about loyalty either, they’ll leave as soon as a better opportunity presents.— JeanLBB69 (@JeanLucBBX) April 29, 2024 This arrangement also involves a considerable waiting period; a substantial 90% of these tokens will remain unclaimable until May 10, 2024, and they won’t be immediately transferable upon release.so eigen is: -non transferable for who knows how long- March 15 snapshot-pendle/other defi prob not included in s1- very aggressive anti vpn restrictionsany other bummers i missed?— GarrettZ (@GarrettZ) April 29, 2024 Adding to the tension, the airdrop has excluded potential participants from 30 countries, including major markets like the United States, Canada, China, and Russia, with EigenLayer implementing stringent measures to prevent circumventing these restrictions via VPNs. This move sparked additional grievances among those excluded. I can't imagine naming a token like this and then blocking so many countries, including aggro-blocking VPNs. Yikes. pic.twitter.com/WvHrJ6A2NW— DeFi Dad defidad.eth (@DeFi_Dad) April 29, 2024 Notably, the distribution of tokens has also been a point of contention. Prominent voices in the crypto space, including investor CoinMamba and analyst CryptoTelugu, have openly criticized the uneven allocation that favored insiders and early contributors with 55% of the tokens, leaving only 5% for community stakers.So EigenLayer team and investors are getting 55% but stakers are getting only 5% and even that will not be transferable at the beginning.The amount of greed crypto developers and VCs are exhibiting just keeps suprising me every time..— CoinMamba (@coinmamba) April 29, 2024 In defense of the stakedrop’s structure, Henrik Andersson, CIO at Apollo Capital, argued that the linear distribution model was designed to be the most equitable solution, aimed at circumventing issues like Sybil attacks, and highlighted the benefits of the stakedrop’s no-connection, no-signature verification process for checking allocations. .@eigenlayer 15% stakedrop = generous.Season 1 phase & 2 treated equally = good. Sometimes people are just trying to find reasons to be upset. $EIGEN — Henrik Andersson (@phenrikand) April 29, 2024
However, community feedback suggests a preference for a more generous token distribution, proposing that a fairer approach might involve rewarding each eligible user with at least 100 tokens to better balance the perceived disparities.Prompted by the strong community feedback, discussions within the Eigen Foundation about a potential reevaluation of their airdrop strategy have begun, reflecting a critical need to sustain support and goodwill among the broader crypto community. EigenLayer Faces Surge in Withdrawals Amid Airdrop ChallengesFollowing concerns about the distribution of recent airdrops, EigenLayer has experienced a noticeable surge in withdrawals. Since the end of April, 14,000 wallets—about 13% of all users—have moved to withdraw their funds. This uptick in activity stems from users' dissatisfaction with how the airdrop was managed.Daily EigenLayer Withdrawal Queue Count. Source: DuneSo far, the total extracted funds have risen to around 30,600 ETH, which translates to around $89 million. This figure constitutes 0.6% of the protocol’s total value locked, suggesting that it's predominantly the smaller investors who are pulling out their stakes.Before the controversy, EigenLayer stood as a titan in the decentralized finance (DeFi) realm, ranking as the third-largest protocol with a TVL of $16.3 billion, as reported by DeFiLlama. The platform’s unique offering allows users to re-stake Ether or liquid staking tokens on third-party applications, thereby amplifying their yield through what is known as Actively Validated Services.Source: DeFiLlama ConclusionEigenLayer's airdrop strategy sparked controversy due to limited token allocation, exclusion of major countries, and an uneven distribution favoring insiders. The community backlash led to a surge in withdrawals, but the financial impact was minimal. EigenLayer now faces the challenge of regaining trust and support. FAQs1. Why are users upset about EigenLayer's airdrop?Users criticize the airdrop for making only 5% of tokens available, excluding participants from 30 countries, and allocating a larger share to insiders than to community stakers.2. How did EigenLayer defend their airdrop strategy?EigenLayer claims their linear distribution is fair and avoids Sybil attacks. They also emphasize the ease of checking allocations without needing connections or signatures.3. What changes might EigenLayer make to their airdrop?The Eigen Foundation is considering changes due to community feedback. A popular suggestion is to distribute at least 100 tokens to each eligible user for a more balanced allocation.4. How has the airdrop controversy impacted EigenLayer?While the total value locked barely changed, over 13% of users withdrew their funds in protest. This suggests dissatisfaction primarily among smaller investors.This article has been refined and enhanced by ChatGPT.