EigenLayer scandal exposed: forced project owner to airdrop "reward its own employees" and made $5 million

EigenLayer, a platform known for its commitment to neutrality and investor protection, is facing scrutiny following reports of its employees receiving substantial token airdrops from projects using its technology. The revelations, reported by CoinDesk, have sparked concerns over potential conflicts of interest and improper conduct.

Allegations of Token Airdrops

According to CoinDesk's investigation, employees of EigenLayer's developer, Eigen Labs, reportedly received millions of dollars worth of tokens from projects that relied on EigenLayer’s technology. The issue emerged when several projects confirmed they had sent tokens as a form of compensation or gratitude to Eigen Labs staff. The total value of these tokens during market peaks was close to $5 million, though their current value has dropped significantly.

Details of the Airdrops

Three notable projects, Ether.Fi, Renzo, and AltLayer, are reported to have distributed tokens to Eigen Labs employees:

• AltLayer: 46,512 ALT tokens

• Ether.Fi: 10,490.9 ETHFI tokens

• Renzo: 66,667 REZ tokens

At their peak, these airdrops were worth approximately $30,000, $80,000, and $16,666, respectively.

Concerns and Responses

Reports indicate that Eigen Labs employees were not only recipients of these tokens but also that there was significant pressure on some projects to comply with these airdrop requests. While Eigen Labs has stated that it only provided wallet address lists upon request and that it has since banned such practices, one project team claimed they were pressured to comply despite not having made a request.

On-Chain Analysis

Blockchain analyst @defioasis found evidence of 51 addresses, presumably belonging to Eigen Labs employees, receiving a total of 487,933 ETHFI, 1,964,838 ALT, and 1,335,090 REZ tokens. The peak value of these holdings was over $5.5 million. Analysis showed varied reactions among these addresses, with a significant portion choosing to sell their tokens.

Official Response

EigenLayer officially responded to the controversy by denying any misconduct or undue influence. They invited anyone with evidence of inappropriate behaviour by their team to report it directly. Despite this, the community remains sceptical, especially as EigenLayer has acknowledged receiving tokens from projects.

Conclusion

The allegations against EigenLayer raise significant concerns about conflicts of interest and the ethics of compensation practices within the crypto space. As the situation develops, it will be crucial to monitor how EigenLayer addresses these issues and how they impact the broader perception of the platform.