Perhaps the most high-profile cryptocurrency airdrop to date is set to begin on Friday, but it won't necessarily come with the kind of enthusiasm its creators had hoped for.
lamina propria, Re-secure the platform Ethereum accumulated $16 billion worth of crypto assets within a year of being open to users, even before its official launch Released last month. When most of that money came in, the project was little more than a glorified blockchain wallet on the Ethereum blockchain, a defunct lockbox with the prospect of future rewards dangling, but no real functionality yet. There was no. (The project he “launched” pooled security services in April, but many mission-critical features are remains missing).
However, it is the details surrounding the token distribution that are causing a lot of criticism on X and other social media platforms. The tone has become so negative that some industry insiders fear it could lead to the end of the hugely popular cryptocurrency incentive system known as “points” rewards.
As its main incentive model, depositors to EigenLayer were rewarded with: point – Aggregates tracked by EigenLayer and other third parties, accumulated according to how much money individuals donate to projects and for how long. Although points themselves were not crypto tokens, most depositors expected that points would eventually become redeemable for crypto tokens. This was the expectation after months of similar programs by other emerging crypto projects.
In addition to depositing into EigenLayer and earning points, some have started trading points directly on platforms like Pendle, which offers “40x leverage” on points trading.
EigenLayer's points program has helped attract users and bring in billions of dollars, but when the EIGEN token airdrop was finally announced last week, the project's community exploded with anger.
First, it became clear that the tokens would not be transferable until an undetermined date in the future. This means users will have to wait longer to cash out their investments.
“Although there was no intentional communication that tokens would be transferable on day one, the fact that the EigenLayer points program has been running for nearly a year certainly raises the expectation that depositors will be able to claim their tokens on day one. “Day 1,” said Luksus Automuro, head of research at blockchain market intelligence firm IntoTheBlock. “I understand that they want to further decentralize their tokens, but it was a mismanagement of expectations that was not properly addressed.”
Further headwinds revolved around EigenLayer's decision to restrict airdrops to users in certain regions, even though the project did not place any geographic restrictions on users' deposits and point earning. Airdrops will no longer be available to users in more than a dozen countries, including the United States, Canada, and China.
“There was a lot of 'wink, wink' going on over points and all this stuff going on about how they created an infinite sum game where everyone wins. And they basically We cut off two-thirds of potential users and airdrop recipients,” said one of Eigenlayer's venture investors, who agreed to speak on condition of anonymity. “I think it's perfectly fine to separate the United States from airdrops, but then don't let the U.S. military use airdrops in the first place.”
Other criticisms came down to the token's “Season 1” distribution plan. The plan will put EIGEN tokens in the hands of some point earners, while others will have to wait for an unspecified Season 2 airdrop. This means that users who deposited into EigenLayer through some Liquid Risk services and other third-party platforms may find that they are It means that you do not yet know how many EIGEN tokens you will receive.
“EigenLayer decided to allow other people to play all these crazy games in a kind of hypothetical way. They could have said, 'No, don't do that.' We have not made any commitments to honor these points,” said Mike Silgadze, founder of liquid restaking platform Ether.Fi.
lamina propria Fixed token plan Although in response to community backlash, it is unlikely that this change will be enough to bring EigenLayer back into the good graces of the crypto community.
EigenLayer isn't the only recent project struggling to meet the expectations set by the points program.
Renzo faced EigenLayer's liquid restaking protocol. similar backlash Last month, when its points system failed to meet investor expectations. Blur, one of the originators of crypto points, has come under fire for repeatedly extending the points period and changing the rules on when and how tokens can be airdropped.
While some points programs have been converted to airdrops with little controversy, many of them, especially large projects like EigenLayer, are increasingly leading to disappointment.
Many investors are starting to think that this widespread practice among crypto startups may finally be coming to an end.
Silgadze explains that the point was a way to “promote protocol activity prior to token issuance.” This is an improvement over the old system in which users manipulated blockchain protocols to “farm” airdrops, although it was unclear exactly what activities would ultimately lead to airdrops. . A points-based system “makes it even clearer to people what the protocol wants users to do,” Shirgadze said.
Point systems are a great way to attract potential users, but they also exist as a result of regulatory protection.Cryptocurrency companies are hesitant to sell tokens directly Initial Coin Offering (ICO) StyleDoing so could put them in the crosshairs of regulators.
But when it comes to providing investor protection and transparency, Robert Leshner, founder of Compound and Robot Ventures and investor in EigenLayer developer Eigen Labs, thinks the points are the worst. . “The basis of investor protection is to ensure that there is no information asymmetry between investors and sponsors. And the point is that it creates the largest information asymmetry that exists in cryptocurrencies,” he said. . “Everything is at the discretion of the team, and we hope that our users and investors are treated well by the team.”
Leshner believes the repeated failures to earn points over the past year will ultimately lead to their demise.
“When you look at EigenLayer, one of the biggest, most ambitious, and most serious projects in all of cryptocurrencies, stop your points program. If EigenLayer can’t get this right. , who can? No one can.”
