EigenLayer Under Fire for Ambiguous Token Allocation

EigenLayer Criticized for Lack of Token Transparency

EigenLayer is currently under scrutiny after admitting that it did not fully disclose the allocation details of its insider tokens. The platform launched its EIGEN token on October 1st, initially experiencing a price surge. However, shortly after, the token's value dropped by 22%, raising concerns among investors and the community.

EigenLayer Token 

When EigenLayer first launched in April, it secured significant investments, including a $100 million contribution from Andreessen Horowitz and other prominent investors. The company positioned itself as a competitor to Lido, the leading liquid restaking protocol on Ethereum. At the time of the token launch, EigenLayer assured its community that a majority of the EIGEN token supply would remain locked for at least a year. Specifically, 29.5% of the total supply was allocated to early investors, and 25.5% was designated for contributors.

Community Frustration and Market Response

EigenLayer had promised that the allocated tokens were under a “full lock” agreement, meaning insiders would not be able to cash out their rewards. However, it has now been revealed that these insiders have accessed and sold their rewards, contradicting the initial promise. In an announcement on X (formerly Twitter), EigenLayer clarified that early investors could indeed sell the rewards generated from their locked tokens. This revelation has sparked frustration among community members who believed that locked tokens would not yield tradable rewards.

Despite the backlash from the community and concerns over the transparency of token allocation, traders remain optimistic about the EIGEN token. Following the unlock on October 1, 2024, EIGEN made a strong market debut, indicating continued interest and confidence from investors. 

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