EigenLayer Announces Airdrop Information: A Grand Airdrop Frenzy or Collapse?

EigenLayer is a protocol based on Ethereum that introduces the concept of restaking. Users who stake native ETH or use Liquidity Staking Tokens (LST) can choose to join EigenLayer's smart contracts to restake their ETH or LST, extending cryptographic economic security to other applications on the network to earn additional rewards.

EigenLayer supports the secure operation of other blockchain protocols and applications by leveraging ETH already staked on Ethereum, a process known as restaking. Restaking allows Ethereum validators to use part or all of their staked ETH to support other Active Validation Services (AVS), such as bridging protocols, sorters, and oracles. These services typically require their own staking and validation mechanisms to ensure network security, but with EigenLayer's restaking functionality, they can secure Ethereum-level security without needing to attract significant capital themselves.

In less than a year, EigenLayer has attracted over $15 billion in Total Value Locked (TVL). Today, Eigen Foundation announced the details of the $EIGEN token airdrop.

Token Utility and Airdrop Mechanism

$EIGEN is positioned as a general-purpose, verifiable “work token.” A “work token” refers to utility tokens that can be staked by participants to perform certain tasks, such as blockchain validation. If participants fail to fulfill specific work commitments, their staked “work tokens” may face penalties or be slashed.

At its launch, EIGEN has a total supply of 1,673,646,668.28466 tokens, with specific allocations as follows:

• Community: 45% plus all future inflation

• Equity Ratio: 15%

• Future Community Initiatives: Inflation rate increased by 15% after activation

• Research and Ecosystem Development: 15% allocated by the Eigen Foundation for research, grants, operational expenses, and overall ecosystem growth

• Investors: 29.5%

• Early Contributors: 25.5%

EigenLayer will distribute 15% of EIGEN tokens through airdrops, with the first season's announced airdrop plan allocating 5% of EIGEN tokens. The snapshot for the first season's airdrop plan was taken on March 15, 2024, and the airdrop claim period is from May 10 to September 7.

The first season's airdrop (Season 1) will be conducted in two phases. Phase 1 will distribute 90%, targeting users who have restaked directly through EigenLayer or through liquidity restaking protocols. Phase 2 will distribute 10% to users interacting with EigenLayer in more complex ways (such as Pendle, Equilibrium), with the second phase of the airdrop expected to begin one month later.

After the release of the EIGEN token airdrop rules, criticism arose due to the “early tokens being non-transferable,” which led some community members to mention that issuing non-transferable tokens not only lowers market expectations for the airdrop but also prevents airdrop participants from truly benefiting.

Project Development and Expectations

EigenLayer began supporting user staking in June 2023, initially imposing staking quantity limits due to being on the test network. Over time, these limits were raised multiple times, resulting in a Total Value Locked (TVL) of nearly 16 billion within less than a year.



Unlike liquidity staking protocols, EigenLayer not only captures the value of staked ETH on the Ethereum beacon chain to maintain the network but also acquires additional value through AVS. Particularly in the modularization trend, where various projects need to build their own Layer 2 or Layer 3 to reduce network costs, EigenLayer can leverage its staking system to create a more affordable “consensus layer,” making it highly attractive to such projects.

Despite EigenLayer's current prosperity, it relies on undistributed airdrops. After the airdrops, if the protocol's revenue fails to meet stakers' expectations, capital outflows may occur, reducing EigenLayer's ability to provide security for other protocols. EigenDA, EigenLayer's first AVS, faces concerns about its ability to capture value due to Celestia, a similar service, having underwhelming revenues.

Airdrop Frenzy or Collapse？

After the airdrop information was announced, the market's perception of the event varied. EigenLayer's business development direction and financing situation have already predetermined its diluted valuation to potentially be in the tens of billions of dollars. From the information gathered so far, the market's concerns about EigenLayer mainly revolve around the following points:

• The announcement of the airdrop information may lead to outflows of Total Value Locked (TVL), reducing the protocol's ability to provide security.

• Some users who deposited ETH early on cannot find information about the airdrop.

• The high valuation in the primary market compresses the space in the secondary market.