P2E Gamefi

EigenLayer Encounters Surge in Withdrawals Following Airdrop Controversy

EigenLayer has recently introduced the EIGEN token. Despite its innovative nature, the airdrop of this token has faced criticism due to geographic restrictions and limited allocation to early adopters. This has led to frustration within the crypto community and has opened up opportunities for other protocols, like Karak, to gain market share.

EigenLayer Introduces EIGEN

In April, EigenLayer released the EIGEN token through a White Paper. This token can be utilized in various applications that rely on subjective agreement, such as prediction markets, cloud storage, and gaming virtual machines. EIGEN supports consensus for statements that cannot be directly verified on-chain but can be validated using off-chain data. The token aims to form a consensus on these statements and compensate for user losses caused by faults.

EigenLayer’s EIGEN token, similar to Augur’s REP, is versatile and can be used in different contexts. It can help isolate decentralized apps during forks and determine the social consensus cost. However, the airdrop of EIGEN faced criticism for its distribution plan and limitations on trading.

Is EigenLayer Airdrop Generous?

EigenLayer allocated 15% of the total EIGEN supply for distribution, with only 5% allocated to early users. The distribution plan, alongside restrictions on trading and geographic limitations, led to dissatisfaction among users. The linear airdrop distribution model, which favored large stakeholders, was also criticized.

The strict geographical restrictions on the airdrop excluded users from around 30 countries, causing further frustration. Despite some positive feedback on the allocation and distribution system, many in the crypto community were disappointed with EigenLayer’s airdrop.

EigenLayer Faces Mass Withdrawals

Following the airdrop controversy, EigenLayer experienced a significant number of withdrawal requests, resulting in a decrease in total value locked. This mass withdrawal was triggered by the exclusion of certain participants from the airdrop. The protocol’s TVL is expected to be impacted in the coming weeks as a result.

Anndy Lian, a blockchain expert, expressed concerns about the impact of excluding regions on the financial stability of the protocol. The withdrawal processing time of seven days means the effects of the mass withdrawals will be felt in the near future.

What is EigenLayer

EigenLayer is a protocol on the Ethereum platform that focuses on restaking to enhance cryptoeconomic security. Users can rehypothecate Ethereum and extend security contributions to other applications on the network. By allowing users to restake ETH, EigenLayer enables the deployment of new applications and projects while enhancing security.

New Challenger for EigenLayer

Karak, an Ethereum-based protocol for restaking, has seen a significant increase in TVL and is gaining interest as a potential challenger to EigenLayer. Karak’s support for a wide range of assets and impressive financial results make it attractive to users. With Karak’s growing popularity, it may pose a threat to EigenLayer’s market share.

Leave a Reply

Your email address will not be published. Required fields are marked *

Our Company

Get Latest Updates!

    Get all the latest updates on the crypto scene, including access to exclusive airdrops.

    cryptochronicle.xyz @2024. All Rights Reserved.