EigenLayer Phase Two Airdrop Underway Amidst New Anti-Sybil Measures as Airdrop Terms Faces Criticism

The Basis of EigenLayer

EigenLayer is a decentralised ETH restaking protocol that enhances the security and functionality of various digital services.

It employs a unique mechanism called "inter-subject forking," which allows the reuse of ETH on the consensus layer.

Users staking ETH natively or with a liquid restaking token (LST) can opt into EigenLayer smart contracts to restake their ETH or LST, thereby extending cryptoeconomic security to additional network applications and earning extra rewards.

The protocol enables users to earn additional yields on top of Ethereum staking rewards by delegating their staked assets to secure third-party Actively Validated Services (AVSs) while still participating in Ethereum validation.

This dual functionality provides enhanced security for AVSs and maximises returns for stakers.

EigenLayer is the second largest DeFi protocol by total value locked (TVL) with over $20 million less than two weeks ago.

At the time of writing, its TVL is close to $18 million according to DefiLlama.

As of now, EigenLayer has attracted $165 million in funding from Blockchain Capital, Polychain, Coinbase Ventures, and others.

The latest funding round (private) ended on 22 February with $100 million raised, and the investor is a16z (Andreessen Horowitz).

Eigen Labs CEO Sreeram Kannan shared the fundamental value of EigenLayer.

Phase One and Phase Two of Season One's Airdrop

The EigenLayer airdrop is a multi-phase initiative aimed at distributing $EIGEN tokens to the community, fostering engagement and rewarding dedicated users.

Phase One, which went live on 11 May, witnessed an impressive 88% of eligible tokens being staked by the community, demonstrating robust support for the project.

The second phase of the EigenLayer airdrop commenced on 19 June.

This phase incorporates an additional 10 million tokens that were reclaimed following the mitigation of a Sybil attack in the first phase, bringing the total to almost 113 million EIGEN tokens.

Users who interacted with DeFi and LST protocols such as Kelp, EtherFi, Pendle, and Equilibrium before 15 March, are eligible to claim tokens until 7 September.

The project posted:

"The Eigen Foundation reserved allocations for each LRT protocol based on interactions with EigenLayer. Specific allocations were determined by each LRT with respect to its end users."

Those who claimed within the first 24 hours received a 2.5x bonus on their token allocation.

In line with the first season, the second stakedrop season will also allocate 5% of the supply to participants.

EigenLayer has stated that it conducted an analysis of users to identify and prevent potential Sybil attacks before finalising its Phase Two allocations.

Claims for Phase One of EIGEN's stakedrop remain open but are not currently transferable; however, users have the option to stake and delegate their tokens.

The target date for enabling transfers is set for September 2024.

The foundation has announced that Season Two of the stakedrop is now in progress and plans to disclose further details in the coming weeks.

Based on their blog post, more updates can be seen in the post below with regard to the upcoming plans.

Preliminary estimates value $EIGEN at around $4.40 per token in the perpetual futures market, despite being currently non-transferable.

This value is anticipated to rise once the tokens become transferable later this year.

So how to claim?

1) Visit their official web page

2) Then follow the instructions to claim, stake, and delegate your EIGEN

Airdrop Terms Facing Backlash Since Phase One's Inception

Phase One of EigenLayer's eagerly awaited airdrop has sparked criticism from various members of the project's community.

EigenLayer announced the commencement of claims for its much-anticipated airdrop in May, with one-third of the 15% allocation of Eigen's supply designated for Season One points holders.

However, numerous community members have expressed dissatisfaction with the airdrop's terms, citing the non-transferability of the tokens, the use of geo-blocking and VPN restrictions, and the perceived inadequacy of allocations for smaller users.

Critics have highlighted that EIGEN tokens are initially non-transferable, preventing holders from selling their tokens.

EigenLayer has also faced criticism for excluding liquid restaking protocols from the airdrop, barring users from seven significant jurisdictions, including the United States (US) and Canada, and its method of linearly allocating tokens.

The Eigen Foundation has justified the linear distribution approach as a measure to thwart Sybil attacks, where individuals could exploit multiple addresses and bots to claim an unfairly large portion of the airdrop.

An X user complained:

"Honestly the linear approach is f*cking stupid. Basically makes 1000-2000 Eigen stakers happy at the expense of 100k who will get peanuts."

Despite this, many users remain unhappy with their token allocations.

Sentosa0053 posted in EigenLayer's Discord:

“Linear allocation for small user is terrible.”

Others have objected to the initial non-transferability of the tokens, which will remain in place until an unspecified future date, even though EIGEN claims became available on 10 March.

The Eigen Foundation has defended its decision, explaining that the delay is necessary to ensure that critical features, such as "payments and slashing parameters," are functioning correctly before EIGEN tokens can be freely transferred.

Pendle, a yield tokenisation protocol that enabled leveraged Eigen points farming through LRTs, was notably absent from the initial airdrop phase.

Crypto_condom, a popular web3 analyst, noted:

“Let me get this straight. Pendle is responsible for a large amount of deposits to EigenLayer because of the points meta...but $EIGEN is going to rug Pendle users for season 1?"

However, with EigenLayer's first airdrop Season distributing tokens to eligible wallets over various "phases," TN Lee, Pendle's co-founder and CEO, anticipates that Pendle users will receive EIGEN tokens at a later stage.

He noted:

“While some users may not receive tokens in the initial phase, they may still be eligible for tokens later in the same season.”

Geographic restrictions have also prevented users from certain countries, including the US, Canada, China, and Russia, from claiming EIGEN tokens.

The foundation's attempts to enforce these restrictions by blocking VPN users from accessing its claims portal, despite previously accepting deposits from these users, have been met with disapproval.

Furthermore, users have pushed back against the immediate vesting of tokens allocated to EigenLayer's investors, which will allow them to sell their EIGEN as soon as the tokens become transferable.

With 55% of EIGEN's supply reserved for its team and investors, some community members suspect that the airdrop was structured to primarily benefit insiders.

The Token Generation Event (TGE) is slated for 10 September.

EigenLayer Adds Whitelist Security to EigenDA Against Sybil and DDoS Threats

EigenLayer has introduced an extra layer of security for its EigenDA data availability service on the Ethereum mainnet to safeguard against Sybil and distributed denial of service (DDoS) attacks.

As per a 23 June post from EigenDA, the whitelist security feature employs either an internet protocol address or Ethereum's elliptic curve digital signature algorithm (ECDSA) authentication to ensure heightened protection and secure access to the service.

ECDSA authentication is a cryptographic technique used to verify the identity of a user, device, or system.

It is grounded in the principles of public-key cryptography and utilises elliptic curve cryptography to ensure secure authentication.

With this added security measure, EigenLayer aims to protect the integrity of its service while ensuring it remains accessible to all clients.

EigenDA's free tier offers a throughput of up to 768 kilobytes per 10-minute window, which surpasses the requirements of even the most active rollups on Ethereum.

For example, Base utilises fewer than two blobs every 10 minutes.

Through its partner registration page, interested parties can work with EigenDA to customise solutions that cater to their specific data requirements, supporting a diverse array of applications and innovations that demand high-throughput capabilities.

EigenDA is capable of generating synthetic loads of 0.6 megabytes per second and achieves peak throughputs of up to 10 megabytes per second on the mainnet.

Upcoming Developments

EigenLayer, which launched on the Ethereum mainnet in April 2024, has already amassed over $12 billion in deposits.

The platform facilitates the establishment of new proof-of-stake (PoS) projects by leveraging a broader trust network, thereby eliminating the need for distinct security measures.

The company is also in the process of implementing permissionless payments for blob throughput on EigenDA, with the goal of releasing this feature by the end of the year.

This enhancement will allow users to secure bandwidth at a predetermined rate to accommodate high throughput requirements.

Behind the Scenes of EigenLayer

Founder Sreeram Kannan

The protocol, founded in 2021 by Sreeram Kannan, only began accepting deposits last June.

Kannan is an accomplished information scientist, entrepreneur, and associate professor at the University of Washington.

His expertise spans information sciences with applications in blockchains, AI, wireless technologies, and computational biology.

Sreeram holds a Ph.D. in information theory of wireless networks and distributed computation from the University of Illinois Urbana-Champaign.

He has interned at Qualcomm and Microsoft, and holds a Master of Science degree in Mathematics from the University of Illinois Urbana-Champaign.

His socials: X and LinkedIn

Engineer Robert Raynor (top middle)

Raynor, a former Air Force officer with a background in applied physics, is deeply immersed in modern machine learning research.

His focus spans data-centric AI, the economics of data, and causality.

Currently, he explores the application of causal concepts in developing robust deep models and representations, alongside investigating how causal learning can leverage actively guided data acquisition strategies.

His socials: X and LinkedIn

Research Soubhik Deb (top right)

Deb, a third-year Ph.D. student at the UW Blockchain Lab, focuses on designing, developing, and deploying Web3.0 systems to advance the democratisation of trust, data, and control in digital platforms.

Formerly an industrial researcher at NEC Corporation, Japan, specializing in 5G technology, he holds a Dual Degree (Bachelors and Masters) in Electrical Engineering from the Indian Institute of Technology Bombay.

His socials: X and LinkedIn

Product Vyas Krishnan (bottom left)

Krishnan serves as a Product Lead, bringing a wealth of experience in programming, entrepreneurship, and financial services to his role.

Prior to joining EigenLayer, he held the position of Product Owner at Nium and founded a subscription-based catering company.

During his internship at US Foods, Vyas demonstrated his technical prowess by designing and implementing a prototype infrastructure using TensorFlow.

He also played a key role in engineering scalable cloud ETL processes and modernising legacy database solutions to cloud architecture standards.

With a strong foundation in business strategy, he conducted exploratory data analysis and developed scoring models while serving as an undergraduate researcher at the University of Illinois at Urbana-Champaign.

His socials: X and LinkedIn

Engineering Bowen Xue (bottom middle)

Xue is a current Ph.D student at the UW Blockchain Lab, having earned his Master's degree in Electrical Engineering from UW.

His research focuses on blockchain technology and computational biology.

Previously, he specialised in implementing 802.11 MAC layer on software-defined radio and conducting image segmentation for computer vision applications.

His socials: GitHub

$EIGEN Airdrop Controversy in DeFi Community

As EigenLayer expands its services on the Ethereum mainnet, it fortifies the blockchain's security infrastructure, maintaining its status as a reliable platform for diverse PoS projects.

This strategy not only bolsters security but also expands the trust network essential for innovative advancements within the Ethereum ecosystem.

However, the EIGEN airdrop has sparked debate within the decentralised finance (DeFi) community.

Kuyen Labs co-founder Leandro Schlottchauer suggested it could be the last of the "life-changing airdrops."

Conversely, many EigenLayer participants have criticised the airdrop for prohibiting VPN servers, issuing a non-transferable token, and employing what they perceive as a brief snapshot period.

With that in mind, Coinlive recommends a cautiously optimistic approach.

The EigenLayer community can anticipate further developments and distributions in the upcoming Season 2.

Staying active and engaged with the community can lead to benefits from future airdrop events and protocol updates.

Participation in the EigenLayer airdrop presents a chance to join an innovative staking protocol that improves the security and functionality of decentralised services.