EigenLayer has updated its documentation to clarify its staking practices and reward distribution, aiming to address transparency concerns from its community.
The restaking protocol came under scrutiny this week, facing criticism that early investors were able to stake locked EIGEN -4.61% tokens and receive unlocked rewards — a practice that was seemingly not initially disclosed to the public.
The lack of transparency led to confusion about the true circulating supply of the token and raised concerns over special treatment for investors amid the lifting of transfer restrictions on its native token at midnight ET on Monday.
“One week ago, I discovered that 40% of all EIGEN staked tokens came from just 13 investor addresses,” crypto community member “Karl_0x” posted to X on Wednesday. “In the meantime, the public was unaware of this practice and believed these tokens were in circulation, leading to misleading conclusions about the token's float and, consequently, investment decisions.”
Earlier in the week, ahead of EIGEN trading going live, Kairos Research said that following the distribution of EIGEN tokens during EigenLayer’s two stakedrops, the total circulating supply was expected to be roughly 200 million out of a total supply of 1.67 billion tokens — around 12%.
However, in the stakedrop first season, only 85.4% of tokens were claimed (95 million EIGEN), and so far in season two, just 21.7% have been claimed (18.6 million EIGEN), Kairos Research explained.
“So, in total the ‘circulating supply’ is 114 million at the time of writing. In addition to that, 73 million EIGEN has been restaked via EigenLayer,” Kairos Research said. “Therefore, the actual float is currently 40.43 million EIGEN. It's fair to assume that a 2.42% float is likely to drive a great deal of volatility as price discovery takes place.”
On Wednesday, EIGEN holder “TardFiWhale” said, “Many threads discussing the circulating supply of EIGEN are inaccurate. There are 95 million EIGEN staked, but most people incorrectly believe that this means 95 million out of ~150 million claimed EIGEN tokens are staked. In reality, a significant portion of these are locked tokens belonging to early investors.”
“EigenLayer has recently updated their docs, and you can now see that they allow this. This was not present in the docs as recently as two weeks ago per web(dot)archive(dot)org,” they added.
Responding to the concerns, EigenLayer noted on Wednesday that Eigen Labs and Eigen Foundation had posted disclosures on the treatment of investor staking rewards. The documents show they were last revised on Sept. 30.
EigenLayer said its staking system caps the total annual rewards for EIGEN stakers at 1% of the initial token supply, with 25% of programmatic incentives allocated to EIGEN staking and 75% to ETH and ETH-equivalent staking, ensuring non-investors benefit significantly.
Investors are allowed to stake both EIGEN and other assets, with rewards being unlocked, but Eigen Labs and Eigen Foundation team members are restricted from staking for at least a year. Investors were excluded from initial stakedrops and will only earn rewards through future programmatic incentives, it added.
“It shouldn’t be announced after someone calls you out,” TardFiWhale replied. “This should’ve been announced long ago.”
The Block reached out to EigenLayer for additional comment.
EigenLayer allows users to stake ether to secure third-party networks or actively validated services. The platform's total value locked is over $12 billion, down from a $20 billion peak in June.
The EIGEN token currently trades at around $3.53, giving EigenLayer a fully diluted valuation of $6 billion, according to CoinGecko.
Disclaimer: This article was produced with the assistance of OpenAI’s ChatGPT 3.5/4 and reviewed and edited by our editorial team.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
