Employees receive an average of over $100,000 in airdrops, EigenLayer is embroiled in "bribery" controversy again

Author: flowie, ChainCatcher

Editor: Marco, ChainCatcher

EigenLayer is once again embroiled in controversy over alleged "bribery."

Yesterday, according to an investigation by Coindesk, employees of the re-staking protocol EigenLayer received a large number of airdropped tokens from ecosystem projects that rely on its technology. The total value of these tokens is close to $5 million, with a current value of nearly $1 million as of the time of publication.

Although EigenLabs clarified in an official blog that EigenLabs and the Eigen Foundation prohibited employees from accepting such token airdrops back in May this year.

EigenLabs also stated that there is no evidence to suggest that any employees of Eigen Labs pressured any teams to improperly benefit Eigen Labs or its employees.

However, crypto users seem unconvinced. The comments section on Coindesk's X platform is filled with doubts about EigenLayer's "bribery."

Not long ago in May, after Ethereum Foundation core members Justin Drake and Dankrad Feist announced their roles as advisors to EigenLayer and received a large amount of token rewards as "consulting fees," EigenLayer has been deeply mired in controversy over alleged "bribery" towards the Ethereum Foundation.

The campaign against EigenLabs for alleged "bribery" has gradually escalated into questions about the layered interests within the entire Ethereum ecosystem.

Is the million-dollar airdrop "early incentive" or forced "bribery"?

According to Coindesk's analysis, the airdrop received by Eigen Labs employees, valued at nearly $5 million, mainly comes from three ecosystem projects: Ether.Fi, Renzo, and AltLayer.

AltLayer, Ether.Fi, and Renzo allocated 46,500 ALT, 10,500 ETHFI, and 66,700 REZ tokens to each employee of Eigen Labs, respectively. The peak values of these three airdrops were approximately $30,000, $80,000, and $16,700. This means that each employee of Eigen Labs could receive airdrop "benefits" worth nearly $130,000.

From late January to mid-June 2024, Eigen Labs employees received a total of 487,900 ETHFI (peak value $3.5 million), 1,733,300 REZ (peak value $433,300), and 1,539,600 ALT (peak value $1.02 million), with a peak total value close to $5 million.

WuBlockchain analyst @defioasis discovered through on-chain investigation that 51 suspected Eigen Labs employee addresses, as of August 15, had collectively received 487,900 ETHFI, 1,964,800 ALT, and 1,335,100 REZ, of which 41.3% of the addresses chose to sell ETHFI; 41.5% sold ALT, and 31.7% continued to stake ALT; 40% sold REZ.

How did Eigen Labs employees receive the airdrop? Whether Eigen Labs "extorted" the ecosystem projects has become a core focus.

Eigen Labs stated in a statement to CoinDesk: "For projects interested in airdropping to Eigen Labs, we provided a list of addresses for all Eigen Labs employees."

Ether.Fi founder Silagadze claimed that Ether.Fi proactively requested an anonymous list of employee wallet addresses from Eigen Labs and sent them the airdrop as a "thank you," and that Eigen Labs CEO Kannan was not involved.

However, another team within the Eigen Labs ecosystem claimed that they did not proactively request the employee address list but received it and, due to concerns about jeopardizing their relationship with Eigen Labs, felt compelled to pay in tokens. Fearing retaliation, the project team chose to remain anonymous.

This suggests that Eigen Labs' proactive provision of employee address lists may have created potential "extortion" for the projects.

Moreover, the "opaque" distribution of airdrops by ecosystem projects with vested interests has become a key criticism from the community.

AltLayer is the only project that proactively disclosed its allocation to the Eigen Labs team in a blog post in January. Later, AltLayer's communications head Aparna Narayanan stated that these allocations were "tokens of appreciation."

Although Renzo and Ether.fi mentioned that some airdrops were reserved for ecosystem "partners," they did not mention allocations made to Eigen Labs employees.

Crypto KOL @DrNickA commented on the X platform that one of the uses of tokens is to complete incentives, but the problem is that it was not done transparently. If this was done through a DAO, then there would be no issue at all.

Layered interests raise further questions about Ethereum

This is not the first time EigenLayer has faced allegations of "bribery."

In May of this year, Ethereum Foundation core members Justin Drake and Dankrad Feist announced their roles as advisors to EigenLayer and received a large number of token rewards.

Although Dankrad Feist claimed that receiving a large number of tokens would not change or influence his stance on how the core protocol should be developed, and that he was willing to accept oversight.

However, this has also led to backlash from community users, with many questioning how core members of the Ethereum Foundation could maintain neutrality after receiving benefits. Crypto KOL Cobie stated that Ethereum Foundation members holding dual roles may face conflicts of interest, especially when projects may have conflicts of interest with Ethereum now or in the future.

The financial interactions between the two core members of the Ethereum Foundation and EigenLayer have also led to accusations of bureaucratization against the Ethereum Foundation. Some articles describe the Ethereum Foundation as resembling a "Congress," with Ethereum Foundation researchers becoming "legislators" who are lobbied.

Faced with stagnation in innovation and accusations of bureaucratization, along with stagnant token prices, many crypto users have lost confidence in Ethereum.

The recent controversies surrounding EigenLayer's "bribery" and "extortion" have led some community crypto users to express pessimism about the Ethereum ecosystem in this instance.

Crypto KOL @forgivenever stated: "The political correctness movement of the Ethereum ecosystem this cycle is about splitting the pie and rent-seeking, with LSD/LRT projects bribing Eigen employees, and the Eigen project party bribing Ethereum Foundation members, various fake believers giving air to rent-seekers, and in the end, the market pays the bill. How can you expect Ethereum to rise?"

"Bribery" becomes an unspoken rule, and the end users pay the price?

The opaque distribution of tokens has facilitated "bribery" for project parties seeking interests, making airdrop bribery an unspoken rule in the crypto industry.

Some industry insiders who spoke with CoinDesk indicated that seeking airdrop benefits for employees has become the norm in the crypto industry, even though it is rarely discussed publicly.

In addition to frequent financial interactions within Ethereum projects like Eigen Labs, crypto venture capital firms may also be hotspots for "bribery."

In July, crypto venture capital giant Polychain accused its former employee Niraj Pant of receiving bribes from the invested project Eclipse Labs.

After receiving a 5% allocation commitment of Eclipse crypto tokens, Niraj Pant pushed Polychain to lead a $6 million pre-seed round of financing for Eclipse Labs.

This lack of transparency in airdrop allocations and insider trading raises concerns about "manipulation" of tokens after they go public, which is likely to be ultimately borne by a large number of "misled" users.