- EigenLayer will release a token called EIGEN.
- Billions have flowed into the protocol, fueled partly by airdrop speculation.
- Representatives previously said “there is no token.”
After months of telling frustrated investors “there is no token,” EigenLayer parent company Eigen Labs on Monday published details of a forthcoming token.
Dubbed EIGEN, the token will be distributed in a series of airdrops, and 15% has been set aside for people who have used EigenLayer to “restake” tokens.
But users from dozens of countries are barred from claiming EIGEN tokens. Those countries include the US, China, Russia, and Canada.
Eigen Labs will also bar people using virtual private networks, or VPNs, from claiming tokens. VPNs have been a popular tool for users trying to get around location-based restrictions on crypto activity.
Launched last year in June, EigenLayer quickly became the second largest protocol in decentralised finance, with more than $15 billion in user deposits.
EigenLayer pioneered the concept of restaking — using the same capital and hardware to run multiple protocols. Previously, Ether could be used to secure the Ethereum blockchain. With EigenLayer, it can be used to secure Ethereum as well as a variety of protocols that would otherwise require bespoke blockchains, such as oracles and bridges.
Proponents believe it has the potential to transform Ethereum, and Eigen Labs recently raised $100 million from venture capital firm Andreessen Horowitz.
But the hype has also been fueled by speculation that Eigen Labs would release a token and set aside some of the token’s supply for the earliest EigenLayer users.
That’s because EigenLayer awarded “points” to depositors. Similar points programs have been used by other crypto projects to determine token allocations during airdrops.
Protocols like Pendle boomed on this assumption, letting users trade points and bet on the price of a future EigenLayer token.
But Eigen Labs was coy. When moderators of the company’s Discord channel were asked about plans for a future airdrop, they would reply with something that became a kind of mantra: “There is no token.”
That speculation was rewarded with Monday’s announcement.
Airdrop plans
The first 5% of EIGEN tokens will be distributed among people who have restaked through EigenLayer or a liquid restaking protocol such as Ether.Fi before March15. They will be able to claim their allocation of the token beginning May 10.
One-tenth of that initial allocation will be set aside for “people who interacted with EigenLayer in more complex ways.” That group could include people who used DeFi protocols such as Pendle, according to Eigen Labs.
People who claim the token won’t be able to send it to other crypto wallets.
“Certain goals should be accomplished in the coming months before the EIGEN is made transferable and forkable,” the company said.
The token will be used in the EigenLayer ecosystem to enforce rules that can’t be tracked automatically by blockchain-based applications, Eigen Labs said. That should enable the creation of new protocols on EigenLayer.
“Some potential use cases include transaction ordering, databases, storage services, oracles, artificial intelligence processors, and much more,” Eigen Labs said in documents detailing the airdrop.
The token will have a supply of 1.6 billion at launch, but its supply will be dynamic.
“While an initial emissions schedule is not yet determined or implemented, in the early years, it is expected that the token supply will be inflationary and allocated via protocol mechanisms that benefit solely the EigenLayer community,” according to a blog post detailing EIGEN tokenomics.
Almost 30% have been set aside for Eigen Labs investors, and about a quarter of the tokens have been allocated to “early contributors.” Investors and early contributors won’t be able to sell their tokens fro three years. Beginning in 2027, 4% of their tokens will unlock each month.
Another 15% have been set aside for the newly-created Eigen Foundation and “future community initiatives” each.
The Eigen Foundation is an “independent, shareholder-less entity dedicated to accelerating the growth of the EigenLayer ecosystem.”
The foundation will fund grants programs and the development of the EigenLayer protocol.
Aleks Gilbert is a DeFi correspondent based in New York. Have a tip? Email him at aleks@dlnews.com.
