Eigenlayer’s EIGEN Token Airdrop has sparked controversy among users

Eigenlayer, the pioneering Ethereum reworking protocol, has found itself at the center of controversy following the announcement of the EIGEN token climate.

The airdrop, which was intended to reward early adopters and contributors, has caused backlash from the community due to its complicated distribution plan and the exclusion of certain groups of users.

TLDR

Eigenlayer's airdrop of the new EIGEN token has sparked controversy among users due to its complex distribution scheme and exclusion of certain groups. Users withdrew about 150,000 ETH (approximately $457 million) from the platform in response to the airdrop announcement. The airdrop excludes residents of the US, Canada, China and Russia, as well as users connecting to the system via VPN, which has drawn criticism from the community. The tokens will initially be non-transferable, and a significant portion of the tokens will be allocated to investors and early contributors, raising concerns about the risk of the tokens being sold after they become transferable. The controversial airdrop has led to requests for withdrawals, with more than 12,412 queued withdrawals over the past three days potentially affecting Eigenlayer's TVL.

According to a statement released by the Eigen Foundation on Monday, 15% of the initial 1.67 billion Eigen tokens will be reserved for the community, while the first 5% will go to early adopters who hold “points” on the platform.

While this may translate into higher rewards for some users, many have expressed dissatisfaction with the airport's terms.

One of the main points of contention is that the tokens are initially non-transferable, essentially rendering the reward worthless in the short term.

30% of tokens are allocated to EigenLabs investors, and 25% are reserved for “early contributors”. This distribution raised concerns that a large portion of the tokens could be sold after being transferred, which could affect the value of the token.

The airdrop drew criticism for excluding residents of the United States, Canada, China and Russia, as well as users connected to the system through a VPN.

This decision met with frustration as these users were not banned from the platform but are now excluded from the rewards.

In response to the controversial airdrop ad, users withdrew about 150,000 ETH (worth around $457 million) from the platform.

Eigenlayer looked at release requests, showing more than 12,412 queued releases in the last three days alone. This mass outflow of funds may impact eigenlayer's Total Value Locked (TVL) in the coming weeks.

The controversy over Eigenlayer's airdrop has led to speculation that the reintroduction of rival protocols such as Karak could benefit from discontent among Eigenlayer users. Karak rose 20.5% in TVL last week, while Eigenlayer's TVL fell 4%.