The much-hyped airdrop being run by Ethereum re-staking protocol EigenLayer continues to spark controversy over limited eligibility to claim compensation. As a result, project founders and users across the cryptocurrency ecosystem are joining in.
“The reality is that the days of life-changing airdrops are now behind us,” Leandro Schlottchauer, co-founder and CEO of smart contract developer Kuyen Labs, said in a statement. “It is now clear that airdrops or similar incentives cannot satisfy all community members,” he added.
“Community members were divided on the core team’s plans, including how much to airdrop to early contributors and the limited number of jurisdictions in which users could claim.”
Meanwhile, Mohak Agarwal, CEO and founder of liquid staking protocol Claystack, said EigenLayer’s decision to announce a surprise airdrop was not a viable model in the long term. “Mysterious approaches may initially create excitement, but they often end up disappointing,” Agarwal said. “This pattern indicates a tendency for projects to initially announce a small airdrop supply, anticipate user disappointment, and then offer additional tokens to appease them. This is a short-term solution that is not sustainable in the long term.”
In a surprise blog post on April 29, EigenLayer, the second largest decentralized finance protocol with a total value of $15.67 billion, revealed, among other items, an airdrop plan in which only 5% of the initial token supply will be allocated to early users. . Participated in Season 1. The remaining allocations will be distributed to users in the next “season”. Additionally, users from 30 countries, including the United States, Canada, China, and Russia, cannot claim EIGEN tokens.
The announcement soon drew widespread community condemnation. “It is not right to receive shares from those countries and not compensate them. They took a real risk for nothing.” wrote One user on the social media platform Based on community feedback, EigenLayer announced in a follow-up post on May 3 that it would airdrop an additional 28 million EIGEN to 280,000 wallets.
Despite booming development activity within the cryptocurrency ecosystem, recent airdrops have often failed to keep up with initial traction.
On April 4, cross-chain messaging platform Wormhole transferred $800 million worth of W tokens to selected users, and after the airdrop, its value soared to an astonishing $22 billion in fully diluted market capitalization. However, since then the token has lost more than 50% of its value and was trading at $0.6457 at the time of publication.
Likewise, STRK, the native token of Ethereum layer 2 scaling solution Starknet, has lost 43% in value since its February airdrop. At the time, 701,544 eligible wallets were reportedly controlled by airdrop farmers who claimed STRK tokens by creating duplicate developer accounts on GitHub.
Cointelegraph previously reported that due to its popularity, airdrops were often targeted at farm accounts and Sybil accounts, resulting in large amounts of tokens being allocated to ineligible accounts rather than actual ecosystem users. “As a result, excessive dumping by airdrop farmers after the event ends may damage the project’s reputation, inflate token supply, and lead to price manipulation,” Gamic HQ researchers said.
Related: EigenLayer users are outraged by the limited airdrops, while others say they are ‘generous’