Users
of
the
Ethereum
restaking
pioneer
Eigenlayer,
many
of
whom
are
about
to
be
rewarded
with
a
massive
airdrop
of
a
new
EIGEN
token,
are
voting
with
their
dollars.
In
response
to
what
some
have
called
Eigen
Labs’
overly
complicated
white
paper
and
relatively
limited
rewards,
users
have
withdrawn
about
150,000
ether
(ETH),
worth
about
$457
million,
from
the
platform.
This
is
an
excerpt
from
The
Node
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of
the
most
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Eigen
Labs,
which
recently
raised
$100
million
from
venture
capital
firm
Andreessen
Horowitz,
essentially
pioneered
the
concept
of
restaking
—
the
ability
to
reuse
capital
to
staked
on
Ethereum
to
simultaneously
secure
other
blockchains.
Nearly
$16
billion
has
been
locked
on
the
platform,
which
has
been
called
the
single
biggest
innovation
in
crypto
in
years.
According
to
the
Eigen
Foundation’s
announcement
on
Monday,
15%
of
the
initial
1.67
billion
EIGEN
tokens
will
be
set
aside
for
the
community
and
distributed
over
multiple
“seasons.”
Early
users
who
accrued
“points”
will
be
airdropped
the
first
5%
of
those
reserved
tokens
—
with
one
point
equating
to
one
token.
This
could
equate
to
a
hefty
reward
for
users
who
have
long
been
clamoring
for
a
native
Eigenlayer
token.
However,
many
are
annoyed
with
the
project’s
plan.
Of
particular
concern
is
that
the
tokens
will
be
initially
non-transferable,
essentially
making
the
cash
reward
worthless.
Additionally,
30%
of
the
tokens
will
go
to
Eigen
Labs
investors,
with
another
25%
earmarked
for
“early
contributors.”
While
investors
and
early
contributors
also
won’t
be
able
to
immediately
sell
their
tokens,
the
vesting
schedule
starts
when
they
receive
the
tokens
—
raising
concerns
a
lot
of
tokens
will
be
sold
off
once
they
become
transferable.
“EigenLayer
team
and
investors
are
getting
55%
but
stakers
are
getting
only
5%
and
even
that
will
not
be
transferable
at
the
beginning,”
crypto
trader
CoinMamba
said
on
X.
As
The
Block
reported,
the
token
distribution
plan
echoes
Starknet’s
token
airdrop
that
stirred
controversy
in
February,
before
it
was
reformed
after
community
backlash.
Starknet’s
token
was
created
a
year
before
it
was
made
available
for
trading,
which
gave
investors
a
headstart
on
their
vesting
schedule
and
meant
they
were
able
to
sell
off
just
weeks
after
trading
commenced.
Another
point
of
contention
is
that
many
Eigenlayer
users
will
be
cut
out
of
the
airdrop.
Residents
of
the
U.S.,
Canada
and
China
are
not
going
to
receive
tokens
(alongside
Russia),
and
users
who
interacted
with
the
system
via
a
VPN,
a
popular
means
of
protecting
privacy
by
routing
through
virtual
networks,
will
also
be
shut
out.
This
rankled
some
critics
because
users
from
these
countries
aren’t
barred
from
interacting
with
the
platform,
though
they
are
being
excluded
from
the
reward.
“Accepting
stake
from
those
countries
and
not
rewarding
them
isn’t
right,”
crypto
researcher
Aylo
said
on
X.
“They
took
a
very
real
risk
for
nothing.”
For
its
part,
Eigenlayer
said
that
making
the
token
non-transferable
for
a
few
months
will
enable
the
platform
to
decentralize
and
work
out
how
the
token
could
be
used.
“Certain
goals
should
be
accomplished
in
the
coming
months
before
the
EIGEN
is
made
transferable
and
forkable,”
the
company
said.
While
some
parts
of
the
community
backlash
are
more
valid
than
others,
it’s
hard
to
fault
Eigenlayer’s
plan
to
geofence
U.S.
users,
given
the
U.S.
Securities
Exchange
Commission’s
(SEC)
unclear
guidance
on
airdrops.
As
Variant
Fund
lawyer
Jake
Chervinsky
noted
on
X,
the
SEC
has
“steadfastly
refused
to
provide
a
workable
pathway”
for
crypto
token
registration,
putting
Eigenlayer’s
team
in
potential
legal
jeopardy.
“Non-transferability
and
geofencing
are
both
useful
options
when
it
comes
to
managing
regulatory
risk
around
token
distributions.
They
just
aren’t
the
only
options,
nor
are
they
necessarily
the
right
ones
for
every
team
and
token,”
he
added.
Making
an
asset
non-transferable
limits
any
“reasonable
expectation
of
profit,”
a
key
part
of
determining
whether
an
asset
is
a
security.
Further,
Eigenlayer
is
not
the
first
and
certainly
won’t
be
the
last
project
to
block
U.S.
users
or
exclude
them
from
token
rewards
programs.
While
this
policy
does
punish
users
who
would
otherwise
be
handed
essentially
free
money
—
or
money
earned
for
just
clicking
a
few
buttons
—
it
is
a
reasonable
response
to
the
situation.
“Both
of
these
options
are
on
the
conservative
end
of
the
regulatory
risk
spectrum
for
token
distributions.
I
call
this
a
spectrum
for
a
reason:
given
a
lack
of
regulatory
clarity,
every
team
(with
the
advice
of
their
counsel)
has
to
decide
how
much
risk
to
take
on,”
Chervinsky
wrote.
It’s
an
interesting
day
when
projects
said
to
be
at
the
cutting
edge
of
financial
innovation
are
forced
to
take
a
conservative
approach.
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