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There is no doubt EigenLayer, and the “restaking” narrative it has introduced, has attracted a lot of attention. The protocol has absorbed over $15 billion in staked Ethereum and has become a major talking point. On Monday, the protocol released details on its eagerly anticipated token and airdrop.
EigenLayer seeks to build another layer of efficiency and yield on what liquid staking protocols, such as Lido, have created through “re-staking.” “Re-staking” allows protocols to access the security of Ethereum by borrowing the staked Ethereum from those who deposit it within EigenLayer. The re-stakers then earn their Ethereum staking yield along with a yield from the protocols that are using Ethereum to secure their chains. The protocol will name its token “EIGEN,” and its whitepaper describes the new token as the “Universal Intersubjective Work Token.” The whitepaper also details new use cases that can be built on EigenLayer. These include transaction ordering, databases, prediction markets, storage services, oracles, and artificial intelligence. This is thanks to the protocol’s tokenomics and new “intersubjective forking” capabilities.
One of the criticisms of the token’s upcoming airdrop is the accessibility of the tokens when they start trading. Typically, entities that have accrued “points” can immediately sell their tokens upon release. However, EigenLayer will issue its tokens as “non-transferable,” preventing recipients from selling them for several months. Additionally, EigenLayer will distribute the tokens over multiple seasons. This move may be to incentivise farmers to retain their $15 billion of Ethereum staked within the protocol. However, data from Dune highlighted that over 4,700 wallets are currently in the queue to withdraw their Ethereum.
The announcement also stated that regulatory compliance is blocking many countries, including the US, from claiming tokens. Many feel that the protocol should have disclosed this information when they initially staked, and not only once they tried to claim. Even those using VPNs faced difficulties getting around it.
In total, the protocol will airdrop 15% of the 1.67 billion total supply, releasing 5% in the first season, compared to the 55% allocated to investors and the team. Some question whether these moves aim to prevent the token price from dropping too significantly by the time the team’s and investors’ first tranche of vesting expires. The team did not specify whether vesting will start when the token is created or when it becomes “transferable.” However, the EigenLayer team claims these efforts to slowly introduce the token aim to ensure decentralisation and that the community accepts the token’s utility and governance.