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EigenLayer Faces Backlash Over Stakedrop

Eigenlayer Airdrop

EigenLayer is the Ethereum restaking protocol, which has $15.67 billion locked in Total Value Locked (TVL), and it is now caught up in controversy because of the announcement of its highly anticipated stake drop. The Eigen Foundation’s promise to the community (15% of EIGEN token supply) created difficulties, with many community members taking sides.

Community Discontent Surfaces as EigenLayer Unveils Stakedrop Plans

Blogging on April 29, EigenLayer highlighted the essence of the stakedrop, an anticipated activity within the crypto community. However, the excitement was short-lived for certain users who missed out on the pool allocation process. The fact that the project’s first season began with the distribution of only 5% of the initial allocation turned out to be one of the main criticisms from those who were of the opinion that the given amount was insufficient.

The fact that users could only claim EIGENs after March 10 exacerbated the situation. However, until TBA, users could not trade or move these tokens. However, voices against the ban pointed out that the Eigen Foundation’s defense of this ban as an important step before allowing for token transferability was a shaky argument.

Critics Slam Protocol’s Token Distribution Model and Geo-Restrictions

The issue of concern at this point is the existence of the linear distribution model from EigenLayer and whether those who think it will benefit restakers who are big players more when compared to those who are small players. Some individuals, dissatisfied with the current system, advocated for a fair distribution of the funds received by major stakeholders.

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Additionally, the geopolitical regulations made people feel as though they had fallen behind. Twenty-six countries, including big ones like the US, Canada, and Russia, as well as China, are not eligible to receive EIGEN tokens. Questions about equity and accessibility in this ecosystem led to raised eyebrows.

However, an experienced Australian cryptocurrency fund manager, Henrik Andersson, Chief Investment Officer of Apollo Capital, has shared an opposite opinion. Andersson pointed out that the allocation of 15% of EigenLayer is generous, and the protocol’s transparency is commendable, describing the linear distribution model as an effective way to fight Sybil attacks.

However, EigenLayer’s stakedrop has certainly brought to light conflicting emotions within the cryptosphere, and its distribution model and geo-restrictions are issues of high debate. While EigenLayer offers solutions to these community problems, the project finds itself at a critical juncture in its journey to create a platform that is user-friendly and trustworthy.

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