What
is
perhaps
the
most-hyped
crypto
airdrop
ever
is
set
to
kick
off
on
Friday,
but
not
necessarily
with
the
kind
of
enthusiasm
that
its
builders
may
have
hoped
for.
EigenLayer,
a
restaking
platform
on
Ethereum,
accrued
$16
billion
worth
of
crypto
deposits
within
its
first
year
of
opening
up
to
users
–
even
prior
to
its
official
launch
last
month.
When
most
of
that
money
came
in,
the
project
was
little
more
than
a
glorified
blockchain
wallet
on
the
Ethereum
blockchain
–
a
non-functional
lockbox
that
dangled
the
prospect
of
future
rewards
but
didn’t
yet
have
any
actual
features.
(Although
the
project
did
“launch”
its
pooled
security
service
in
April,
many
mission-critical
features
remain
missing).
But
it’s
the
details
around
the
token
distribution
that
have
generated
the
bulk
of
criticism
on
X
and
other
social-media
platforms.
The
tone
has
gotten
so
negative
that
some
industry
officials
wonder
whether
it
will
lead
to
the
demise
of
the
wildly
popular
crypto
incentive
system
known
as
“points”
rewards.
The
EIGEN
airdrop
As
its
primary
incentive
model,
depositors
into
EigenLayer
were
rewarded
with
points
–
tallies
tracked
by
EigenLayer
and
other
third
parties
that
accumulated
according
to
how
much
a
person
deposited
into
the
project,
and
for
how
long.
The
points
weren’t
themselves
crypto
tokens,
but
most
depositors
expected
them
to
eventually
be
convertible
into
them
–
an
expectation
that
followed
from
months
of
lookalike
programs
from
other
upstart
crypto
projects.
In
addition
to
earning
points
by
depositing
into
EigenLayer,
some
people
began
trading
them
outright
on
platforms
like
Pendle,
which
offered
as
much
as
“40x
leverage”
on
points
trading.
EigenLayer’s
points
program
helped
it
attract
users
and
lure
in
billions
of
dollars,
but
when
the
airdrop
of
the
EIGEN
token
was
finally
announced
last
week,
the
project’s
community
erupted
with
anger.
First,
there
was
the
revelation
that
the
tokens
would
be
non-transferable
until
some
yet-to-be-determined
future
date
–
meaning
users
would
need
to
wait
even
longer
to
cash
out
on
their
investments.
“Although
there
purposefully
wasn’t
any
communication
saying
that
the
token
would
be
transferable
on
day
1,
the
fact
that
the
EigenLayer
points
program
has
been
going
on
for
nearly
a
year
certainly
led
to
the
expectation
that
depositors
would
be
able
to
claim
their
tokens
on
day
1,”
said
Luxas
Outumuro,
who
leads
research
at
IntoTheBlock,
a
blockchain
market
intelligence
firm.
“It’s
understandable
that
they
want
to
decentralize
their
token
further,
but
it
was
a
mismanagement
of
expectations
that
wasn’t
properly
addressed.”
Read
more:
Why
Eigenlayer’s
Airdrop
Is
Controversial
More
blowback
revolved
around
EigenLayer’s
decision
to
restrict
its
airdrop
to
users
from
select
regions
–
even
though
the
project
had
placed
no
geographic
restrictions
on
users
making
deposits
and
earning
points.
Users
from
more
than
a
dozen
countries,
including
the
U.S.,
Canada
and
China,
will
be
barred
from
the
airdrop.
“There
was
so
much
‘wink,
wink’
going
on
around
points
and
how
they
were
making
an
infinite
sum
game
and
everyone’s
gonna
win
and
all
of
this
shit.
And
then
they
basically
cut
off
two-thirds
of
potential
users
and
airdrop
recipients,”
said
one
EigenLayer
venture
investor
who
agreed
to
speak
on
the
condition
of
anonymity.
“I
think
it’s
completely
fine
to
cut
off
the
U.S.
from
an
airdrop,
but
then
don’t
let
them
use
it
in
the
first
place.”
Other
criticisms
came
down
to
the
token’s
“Season
1”
distribution
plan,
which
will
place
EIGEN
tokens
into
the
hands
of
some
point
earners
but
will
force
others
to
wait
for
a
“Season
2”
airdrop
that
hasn’t
been
detailed.
This
means
users
who
deposited
into
EigenLayer
via
some
liquid
restaking
services
and
other
third-party
platforms
don’t
yet
know
how
many
EIGEN
tokens
they’ll
receive
–
despite
the
fact
that
these
services
are
responsible
for
a
lion’s
share
of
overall
EigenLayer
deposits.
“EigenLayer
chose
to
allow
others
to,
sort
of,
rehypothecate
and
play
all
these
crazy
games.
They
could
have
just
said,
‘No,
don’t
do
that.
We’re
not
making
any
commitment
that
we’re
going
to
honor
those
points,'”
said
Mike
Silgadze,
founder
of
liquid
restaking
platform
Ether.Fi.
EigenLayer
revised
its
token
plans
in
response
to
the
community
backlash,
but
it’s
unlikely
that
the
changes
will
be
enough
to
place
EigenLayer
back
into
the
crypto
community’s
good
graces.
The
problem
with
points
EigenLayer
isn’t
the
only
recent
project
that’s
struggled
to
meet
the
expectations
set
by
a
points
program.
Renzo,
a
liquid
restaking
protocol
on
EigenLayer,
faced
similar
backlash
last
month
when
its
point
system
failed
to
meet
investors’
expectations.
Blur,
one
of
the
originators
of
crypto
points,
received
criticism
for
repeatedly
extending
its
points
window
and
changing
the
rules
around
when
and
how
tokens
would
be
airdropped.
Some
point
programs
have
converted
into
airdrops
with
little
controversy,
but
more
and
more
of
them
–
particularly
larger
projects,
like
EigenLayer
–
have
led
to
disappointment.
Many
investors
are
beginning
to
think
that
the
practice
–
which
has
become
ubiquitous
among
crypto
startups
–
may
finally
be
nearing
its
end.
Silgadze
explains
that
points
were
a
way
to
“encourage
protocol
activity
in
advance
of
the
token
launch.”
This
improved
upon
the
old
system,
where
users
would
“farm”
for
an
airdrop
by
interacting
with
a
blockchain
protocol,
but
didn’t
know
exactly
what
sorts
of
activities
would
ultimately
lead
to
airdrops.
Point-based
systems
“give
much
more
clarity
to
people
about
what
the
protocol
wants
you
to
do,”
said
Silgadze.
While
point
systems
are
a
great
way
to
entice
would-be
users,
they
also
exist
as
the
result
of
regulatory
protection.
Crypto
companies
are
hesitant
to
directly
sell
tokens
initial
coin
offering
(ICO)-style,
since
doing
so
could
place
them
in
the
cross-hairs
of
regulators.
But
when
it
comes
to
protecting
investors
and
offering
transparency,
Robert
Leshner,
the
founder
of
Compound
and
Robot
Ventures,
an
investor
in
EigenLayer
developer
Eigen
Labs,
thinks
points
are
the
worst
of
all
worlds.
“The
entire
root
of
investor
protection
is
making
sure
that
there’s
not
an
information
asymmetry
between
the
investors
and
the
sponsors.
And
points
create
the
largest
information
asymmetry
that
exists
in
crypto,”
he
said.
“Everything
is
at
the
team’s
discretion,
and
users
and
investors
are
just
praying
that
they
get
treated
right
by
the
team.”
Leshner
thinks
the
litany
of
points
failures
of
the
past
year
will
eventually
lead
to
a
dying-out
of
the
practice.
“When
you
see
one
of
the
largest,
most
ambitious,
most
genuine
projects
in
all
of
crypto,
EigenLayer,
f_ck
up
a
points
program
–
If
EigenLayer
can’t
do
this
correctly,
who
can?
No
one
can.”