Backlash over EigenLayer airdrop shakes the crypto community!

The EigenLayer airdrop’s recent disclosure has caused a variety of reactions from both cryptocurrency users and volunteers. Some have seen that it was done right, which is good, and others have analyzed it deeply. 

EigenLayer aims to donate 62% of its 8 million tokens to the community, of which 5% is initially targeted at protocol stakeholders. Conversely, the transferability of tokens might be slightly restricted even with such a share distribution plan in place. This has proven to be a cause of concern among many people.

The skepticism and the allegation of scam issues connected with airdrops are not new, as regulatory bodies and the crypto community have already pointed out what they consider fake giveaways. This imprudent behavior can be seen because of the legal measures being undertaken, such as the DeFi Education Fund’s (DEF) lawsuit against the U.S SEC over Beba’s distribution of free BEBA tokens, which is located in Texas with an interest in apparel.

Critics have vehemently objected to EigenLayer’s decision to first restrict the transfer of tokens, with the possibility of purchasing or selling until a specified future period is notified. This decision, together with the exclusion of participants from the central regions like America and Canada, has gathered much criticism from some cryptocurrency community members. The token distribution also raises issues such as the preferential treatment of the more elite stakeholders against other parties.

Eigen has allotted 15% as a community in the entire token allocation. In comparison, another 5% of the allocation has been set aside for the participants of the initial phase of the airdrop campaign. The EIGEN tokens are locked into the “stake drop” model. They will be used in the initial test run of EigenLayer, which is commonly referred to as EigenDA or data availability service. While this approach prevents the permanent drain of liquidity from the tokens, the impact on the usability of the holders also needs to be considered.

While Sreeram Kannan served as a data science professor at the University of Washington before being appointed Stacked founder, the total value locked on the platform was estimated to be $15.7 billion. Still, the move to distribute tokens dubbed an airdrop has drawn scorn. People have doubts about many aspects, such as leaving out some areas, short-term investment periods, and the approach that gives businesses with greater capital an edge over those with less capital.

The decision to refuse users from specific countries, such as the United States, Canada, and China, access to crypto services triggered heated debates about fairness and equality in the crypto industry. This scenario raises questions about disclosing information, regulations, and fairness to all parties dealing with cryptocurrency.

As long as EigenLayer can alleviate the problem and keep progressing, the whole ecosystem will always consider what it does and relies upon. These challenges may affect the level of trust and credibility that EigenLayer has in the market and the overall well-being of the cryptocurrency space.

Trevor Holman

Trevor Holman follows crypto industry since 2011. He joined CryptoNewsZ as a news writer and he provides technical analysis pieces and current market data. He is also an avid trader. In his free time, he loves to explore unexplored places.

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