EigenLayer, ranked second in total value protocols with a value of $15.67 billion, recently announced its ‘stakedrop’. This decision, however, sparked a wave of criticism, largely due to the contentious conditions such as the non-transferable token model and limited snapshot window, coupled with strict geographical restrictions.
As the news spread wide, the cryptocurrency community expressed their displeasure. Many grievances were targeted towards the non-transferable token model, which was generally deemed as a violation of norms in the cryptospace. The strict geographical restrictions were another point of contention. Given that EigenLayer is a global platform, many felt unfairly excluded from the stakedrop.
The backlash now leaves the company amidst a storm of discontent that has been brewing for days. The current situation appears to be a test for EigenLayer to regain the trust that it seems to have lost.
EigenLayer’s contentious stakedrop sparks backlash
Time will tell whether the company will recover or be further impacted by the backlash.
In spite of the controversy, the Eigen Foundation confirmed that 1.67 billion tokens, representing 15% of EIGEN’s total distribution, would be given to the community. However, only a slight 5% of this initial allocation was reserved for early adopters while the rest was earmarked for increasing audience engagement in the future seasons.
This decision and its unfolding have led to various perceptions. While some found this allocation unfair, others argued that the allocation was necessary to prevent potential market manipulation. Amid the heated debates, the Eigen Foundation stands by its decisions while assuring that user concerns will be considered and efforts will be made to streamline the process in the future.
Geographical restrictions also fueled concern, as users from 30 countries, including American, Canadian, Russian, and Chinese participants, were barred. The linear distribution method used by EIGEN was also seen as favoring larger stakeholders. Despite the criticism, Henrik Andersson, while addressing these concerns, praised the 15% token allocation and defended the linear stakedrop model as the most equitable means of distribution.
Andersson, a prominent figure in Australian crypto-investment, reiterated that disagreements over resource distribution are common in communities like DeFi, while emphasizing that the decision was not arbitrary but carefully analyzed. Despite backlash, he urged users to focus on potential investment opportunities.
