Controversy Surrounds EigenLayer’s Restrictive Airdrop Qualifications
EigenLayer, an Ethereum restaking protocol, is facing criticism over its highly anticipated airdrop due to its restrictive qualifications for claiming rewards. The crypto community, including project founders and users, is voicing their concerns about the airdrop.
Leandro Schlottchauer, the co-founder and CEO of smart contract developer Kuyen Labs, stated that the era of life-changing airdrops is likely over. He emphasized that no airdrop or incentive can satisfy all community members. Mohak Agarwal, the CEO and founder of liquid-staking protocol Claystack, also criticized EigenLayer’s decision to surprise users with the airdrop. Agarwal believes that this approach may initially create excitement but often leads to disappointment in the long run.
EigenLayer made a surprise announcement on April 29 regarding its airdrop plans. The second-largest decentralized finance protocol revealed that only 5% of the initial token supply would be allocated to early users from Season One, while the rest would be distributed in subsequent “seasons.” Additionally, users from 30 countries, including the United States, Canada, China, and Russia, would not be eligible to claim EIGEN tokens.
The announcement received widespread condemnation from the community. Many users expressed their dissatisfaction with the geoblocking efforts, arguing that it was unfair to exclude users who took significant risks. In response to the feedback, EigenLayer announced on May 3 that an additional 28 million EIGEN tokens would be airdropped to 280,000 wallets.
Despite the growing development activities in the crypto ecosystem, recent airdrops have struggled to maintain their initial momentum. For example, the cross-chain messaging platform Wormhole distributed $800 million worth of W tokens to select users, causing its post-airdrop valuation to surge to $22 billion. However, the token has since lost over 50% of its value. Similarly, STRK, the native token of Ethereum layer-2 scaling solution Starknet, has lost 43% of its value since its February airdrop. The airdrop was marred by allegations of airdrop farmers creating duplicate accounts to claim tokens.
Airdrops have become a target for farm and Sybil accounts, resulting in tokens being allocated to unqualified accounts instead of genuine ecosystem users. This practice damages a project’s reputation, inflates token supply, and can lead to price manipulation through excessive dumping by airdrop farmers.
The controversy surrounding EigenLayer’s restrictive airdrop qualifications highlights the challenges faced by projects in satisfying their community members while avoiding exploitation by malicious actors.