- EigenLayer is one of the biggest decentralised applications in the Ether ecosystem, offering investors the ability to re-stake liquid staking tokens.
- The project’s highly-anticipated airdrop was met with criticism, as investors from several high-profile nations were geo-blocked from receiving EIGEN tokens.
- Additionally, the community complained that the airdrop favoured those with large deposits, rather than those who have actively contributed to the project over a longer timeframe.
An airdrop can make or break a new cryptocurrency. The “free” distribution of tokens can be a fantastic way for an exciting project to gain important exposure and kickstart their ecosystem. But on the flipside, a bad airdrop can leave the community feeling scorned and permanently damage the project’s reputation. And for EigenLayer, one of the DeFi world’s largest protocols, things didn’t quite go according to plan.
Related: Crypto Banter Says He Is Leaving the Space, Amid Claims of a Worthless Bubble
Re-Staking Platform Sees 13% Drop in Activity in Under a Week
EigenLayer is an incredibly popular decentralised application. The protocol allows Ethereum stakers to re-stake liquid staking tokens to earn additional profit. In simple terms, investors can generate profits on top of profits thanks to EigenLayer. The project’s release of its native governance token, EIGEN, was intended to be a home run that improved its already massive userbase. However, extremely restrictive and “unfair” criteria led to EIGEN’s distribution being hammered by members of the crypto community.
In what some have labelled as a scam, the EigenLayer devs placed significant geo-restrictions on which investors were eligible to receive 100 EIGEN tokens as part of the airdrop. This included investors from the United States – a powerhouse of the crypto market. If the project was transparent about this from the start, it would be an inconvenience but nothing to write home about. However, what concerned participants was that EigenLayer accepted investor deposits from these nations, only to bar them from the airdrop. DeFi users that were exposed to EigenLayer through connected third-party apps were also left behind.
To make matters worse, EIGEN tokens have no secondary market or liquidity – meaning holders are stuck with the coin for the foreseeable future. This isn’t an uncommon move for an airdrop, as it prevents a mass sell-off that can plummet the short-term price. However, for investors that already felt hard done-by, this was another nail in the coffin.
All up, between April 29 and May 2, 14,000 wallets (about 13% of all users) withdrew their assets from the staking service. While these numbers on their own are significant, in reality, most of the big-time users of EigenLayer have stayed put. Approximately 12,000 ETH has been pulled from the app over the past week – accounting for less than 0.25% of the protocol’s entire TVL.
Get the most important crypto news delivered to your inbox by subscribing to the CNA newsletter
Like we see so many times in the financial industry, it’s the small-time investors that are feeling the pinch, while the whales remain largely unaffected.
Credit: Source link
