The ETH restaking protocol EigenLayer announced the launch of its much-awaited native token EIGEN on April 29 with somewhat “tricky” tokenomics and airdrop. While the EigenLayer team seems to be extra-cautious about their token, it has sparked weighty criticism within the crypto community.
Several users debated on Twitter that the team has overcomplicated EigenLayer token launch by adding surreal terms in whitepaper and putting limitations on the claiming method. The EigenLayer team has allocated 15% token supply to the community, of which 5% will be airdropped to existing stakers who acquired points as early adopters.
The major concern here is the unfair allocation of tokens where over 55% is distributed to investors and team members. However, early stakers – who made the protocol a success – are only getting 5% which is way less than a standard community allocation.
As if this tiny allocation was not enough to upset stakers, the initial distribution for them will be non-transferable. It essentially means that tokens could not be sold in live markets for a certain period even after claiming. The team states that such a limit needed to be placed for embarking the decentralization among token holders but they are essentially controlling the market supply by doing so, according to some users.
Another disappointment is that the protocol has discarded Airdrop for users who are situated in the U.S., Canada, China as well as 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 crypto industry swears by.
Earlier in February, the layer 2 protocol StarkNet also followed identical methods for distributing their tokens and it received heavy backlash by the community members. The StarkNet team later had to change their allocation and vesting schedules due to massive outflows. This strategy from EigenLayer also shares similarity with that of StarkNet where investors and team are seeming to get most benefits.
In response to EigenLayer’s unfair allocation, stakers are leaving the protocol and withdrawing their assets. The current withdrawal queue has peaked to the highest level and none stakers are entering the protocol hereafter.
However, the Eigen Foundation – the developer entity behind EigenLayer – released a note yesterday and announced additional 100 EIGEN tokens to all the stakers. It also clarified that the locking unlocking period for team and investors is one year after community allocated tokens become transferable.
The claiming of EIGEN tokens will be available from 10 May onwards and it will remain open until the next 120 days.
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