Quick Links
EigenLayer, the decentralized platform for restaking ETH has unveiled its native token, $EIGEN. The token distribution will be overseen by the Eigen Foundation, a non-profit organization established to govern the EigenLayer ecosystem. Notably, 15% of the total $EIGEN supply will be allocated to the community through a series of stakedrops, incentivizing early participation and network effects.
Tokenomics and Distribution
The total supply of $EIGEN is capped at 1.67 billion tokens. The Eigen Foundation will distribute 45% of the tokens to the EigenLayer community with the rest among investors & early contributors. The community allocation is further divided into three categories:
Stakedrop (15%): Allocated to EIGEN staking will be distributed across multiple seasons, the first season allocating 5% of the initial token supply based on a March 15, 2024 staking activity snapshot.
Community Initiatives (15%): Allocated to fund projects and initiatives that benefit the EigenLayer ecosystem.
Ecosystem Development (15%): Allocated to support the growth and development of the EigenLayer ecosystem.
Stakedrop Details
The community airdrop, a stakedrop by EigenLayer, will distribute 15% of the token supply to users who staked ETH on the platform. This stakedrop will occur across multiple seasons, with the first season allocating 5% of the initial token supply (around 83.68 million tokens) based on a snapshot of staking activity captured on March 15, 2024.
First season’s distribution
90% of the allocated tokens (4.5% of the total supply) will be claimable on May 10, 2024 by eligible restakers. A 120-day claim window allows users to collect their rewards. The remaining 10% (0.5% of total supply) will be distributed in a second phase of the first season, details of which will be announced later.
The distribution is calculated based on the amount of ETH staked and the duration of the stake. Notably, users who participated in native restaking will receive an additional reward boost.
Initially, EIGEN tokens will be non-transferable. This period allows for fostering community consensus on token utility and governance before enabling full functionality. However, users will be able to stake their $EIGEN tokens to secure the Eigen data availability layer (EigenDA) upon launch. Other actively validated services (AVSs) are expected to follow suit and integrate $EIGEN staking in the future.
Why the Stakedrop?
This approach serves several purposes:
Reward Early Supporters: Users who participated in EigenLayer by staking ETH will be rewarded with EIGEN tokens. This incentivizes early adoption and fosters community growth.
Decentralize Token Distribution: Distributing a significant portion of the token supply through a stakedrop helps decentralize ownership and governance within the EigenLayer ecosystem.
Encourage Participation: The stakedrop can attract new users to the EigenLayer platform, bolstering the network’s security and overall utility.
Community Response
The EigenLayer community’s reception of the EIGEN stakedrop is a mix of positive anticipation and critical questions. On the positive side, users appreciate being rewarded for staking via the program. This incentivizes continued participation and fosters a sense of ownership.
However, the community also has some reservations. While the initial concerns regarding the limited stakedrop window (snapshot date of March 15, 2024) seem to be mitigated by the commencement of Season 2, other issues persist. A major point of contention is the non-transferability of EIGEN tokens, while some understand the rationale, others view it as a limitation on liquidity and a disincentive to participation. This, coupled with geopolitical restrictions that prevent users in certain regions (like the US & Canada) from claiming their tokens, has caused disappointment in the community.
Source –x.com/samarveer778
The Road Ahead
The launch of EIGEN, EigenLayer’s native token, along with its stakedrop program, has ushered in a new era for the platform. The Eigen Foundation’s focus on rewarding early participants (attracting over $15 billion in staked ETH) demonstrates strong user enthusiasm and belief in EigenLayer’s potential.
However, the project faces some hurdles. The initial non-transferability of EIGEN tokens, coupled with the current geopolitical climate, has caused disappointment among users and developers who crave more flexibility and participation opportunities. This situation could lead users to explore alternatives like Karak, a competitor backed by prominent venture capitalists such as Coinbase Ventures, Pantera Capital and multiple others with TVL of over $100Mn. EigenLayer’s success hinges on its ability to address these concerns. The Eigen Foundation must carefully consider the evolving needs of its community.
