Yesterday, the encryption media CoinDesk published an article titled "Top encryption startups offer airdrops from other projects to their employees" revealing that EigenLayer has been coercively demanding airdrops from ecological projects. According to an investigation by CoinDesk, employees of Eigen Labs, the company behind EigenLayer, have already received millions of dollars in payments from some other projects that rely on their technology, raising concerns about potential conflicts of interest.

Wu said that an analyst from WuBlockchain, @defioasis, found 51 suspected Eigen Labs employee Addresses through on-chain investigation, which collectively received 487,933 ETHFI, 1,964,838 ALT, and 1,335,090 REZ, with a peak value totaling over 5.5 million USD. Among them, 41.3% of the Addresses chose to sell ETHERFI; 41.5% sold ALT, 31.7% continued to stake ALT; and 40% sold REZ.

EigenLayer Bribery?

A team told CoinDesk that they sent a portion of newly issued crypto assets to each Eigen Labs employee as a 'thank you.' Each employee ultimately received tokens worth up to $80,000. Another team stated that they received a list of wallet addresses provided by Eigen Labs and felt pressured to pay the tokens, or risk jeopardizing their relationship with a company that could determine the success or failure of their business.

In early 2024, more than a dozen blockchain applications are eager to launch on EigenLayer, including cloud computing services and data storage platforms. Also joining this wave are "liquid restaking" services, which make deposits on EigenLayer more user-friendly. These new applications consumed millions of dollars in venture capital and created crypto assets worth billions of dollars when the market was good.

They distributed the new Tokens through Airdrop. In this process, Eigen Labs helped its employees acquire these Airdrops. They distributed a list containing the employees' Wallet Addresses. However, the company insists that they will only provide this list when the projects actively request it.

"For projects that are interested in conducting an Airdrop to Eigen Labs, we provide a list of all Eigen Labs employee Addresses," the company stated in a statement to CoinDesk. Alan Curtis, Chief Business Officer of Eigen Labs, reiterated that the company will only send this list to teams that have reached out and are interested in conducting an Airdrop to Eigen Labs or its employees.

But one team told CoinDesk that, although they did not request it, Eigen Labs still sent them the list. The project's developer stated that Eigen Labs requested the project to provide airdrop rewards to its employees. Due to Eigen Labs' influence, this request is hard to ignore, and the developer expressed concern about potential retaliation during an anonymous interview.

According to CoinDesk's analysis, AltLayer allocated 46,512 ALT to each Eigen Labs employee. Ether.Fi followed closely, distributing 10,490.9 ETHFI per person. Then there's Renzo, where each person received 66,667 REZ. At the price peak, the values of these three airdrops were approximately $30,000, $80,000, and $16,666, respectively.

On-chain records show that from the end of January 2024 to mid-June, Eigen Labs employees received a total of 487,928 ETHFI (valued at $3.5 million at peak), 1,733,342 REZ (valued at $433,300 at peak), and 1,539,563 ALT (valued at $1.02 million at peak).

Some industry insiders who spoke with CoinDesk said that airdrops to Eigen Labs employees have become the norm in the encryption industry: this is one of the common benefits of working with blockchain startups closely tied to the industry, although it is rarely discussed publicly.

"This is a very strange encryption phenomenon, where people occasionally give out free money," said Mike Silagadze, the CEO of Ether.Fi.

Compared to publicly listed companies under government regulation, private encryption startups have a lot of freedom in deciding how to disclose key information, such as the percentage of token holdings.

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

In comparison, Renzo and Ether.fi mentioned on their tokenomics page that some airdrops are reserved for ecosystem "partners," but neither mentioned the employees of Eigen Labs. Kratik Lodha, an authorized representative of RestakeX Foundation, the executor of the Renzo airdrop, stated, "A portion is allocated to ecosystem partners, but this is not something requested by anyone from EigenLayer."

EigenLayer Response: Employees will no longer receive future Airdrops.

Today, EigenLayer responded to a CoinDesk article stating that there is no evidence that employees of Eigen Labs pressured any team to improperly benefit Eigen Labs as a company entity or its employees. They pointed out that as early as May, Eigen Labs mitigated the incentive misalignment for its employees, even in terms of its appearance, by changing policies.

According to the new policy, Eigen Labs employees will no longer receive future Airdrops. Eigen Labs has also not received any special treatment in the past, nor has it pressured or favored any team.

Cryptocurrency companies have various tools (such as joint marketing, investment, fund exchange, Airdrop, etc.) for business development and partnerships, and companies within the EigenLayer ecosystem are no exception. To reward participants in the ecosystem, the list of contributors from the team is considered the preferred distribution mechanism, rather than the list of GitHub contributors that could be susceptible to Sybil attacks.

Therefore, Eigen Labs only helps to provide a list of contributors for multiple projects within the EigenLayer ecosystem, which use these lists for Airdrops.

In response, EigenLayer stated that it had updated its policies as early as May, and in the future, if any project wants to conduct an Airdrop to Eigen Labs, it can only be done to corporate entities.

In June, EigenLayer created the EigenLayer ecosystem network, inspired by the Protocol Guild, allowing projects to list their company addresses so that any projects wishing to conduct an Airdrop can airdrop to these companies. This mechanism utilizes encryption native tools to achieve cross-project incentive consistency, avoiding the problem of incentive misalignment.

In this regard, some have commented that "Eigenlayer institutionalizes the rebate system as company policy and does so on a public ledger."

What does the community think

However, regarding this event, the top comment on the Coindesk article stated: "It may be very popular, but this is basically the purpose of the Token, which is to adjust encryption economic incentives. The function of the Airdrop is to ensure that different participants adhere to the protocol. The problem is that it was not done transparently; if this had been completed through a DAO, there would have been no problem at all."

At the same time, some have said, "The things related to Eigenlayer aren't even considered abnormal. The ethics of the Crypto Assets industry have become so bankrupt that conflicts of interest, insider trading, and bribery have become the norm. A small circle benefits from the systematic exploitation of retail investors, and if you express an opinion on this, you will lose the opportunity to enter this circle."

Remember in May, multiple researchers from the Ethereum Foundation successively disclosed to the public that they had accepted "advisory" positions with the entity behind the restaking protocol EigenLayer, Eigen Foundation, and would receive valuable EIGEN Tokens, which sparked significant controversy in the community and initiated intense discussions, claiming this could affect the neutrality of the Ethereum Foundation.

The Ethereum Foundation is essentially a nonprofit organization. In the crypto industry, such foundations are generally more opaque compared to traditional companies or foundations, lacking basic information disclosure.

Related reading: "Ethereum researcher works for EigenLayer and earns millions in rewards, Ethereum Foundation faces Crisis of Confidence"

The LRT ecosystem project is now pointed towards EigenLayer "tribute", just as EigenLayer once "bribed" the Ethereum Foundation.

Finally, let's have a meme, EigenLayer's idea vs execution.

This article is edited and organized with the assistance of ChatGPT