Eigen Labs Under Fire for Sharing Employee Wallet Addresses for Airdrops
Eigen Labs, a leading startup in the Ethereum ecosystem, is at the center of a controversy over distributing tokens to its employees through airdrops.
An investigation by CoinDesk reveals that the company shared its employees’ wallet addresses with various projects in the EigenLayer ecosystem, facilitating the receipt of tokens by these employees. These airdrops, which reached a value of almost $5 million at their peak, raise concerns about potential conflicts of interest within the company.
Eigen Labs requested that its employees be rewarded with an airdrop. Given Eigen Labs’ influence, it was difficult to ignore this request.
An anonymous project developer
Practice of Airdrops within EigenLayer
Several projects using EigenLayer technology received lists of Eigen Labs employees’ wallet addresses, often upon their request, in order to distribute tokens as a token of gratitude. One team stated that they had sent each Eigen Labs employee an allocation of $80,000 worth of tokens.
However, at least one team revealed that they received the list without soliciting it, feeling pressured to distribute tokens to Eigen Labs employees. This situation highlights the influential position Eigen Labs holds in the ecosystem, capable of making or breaking the success of third-party projects.
Reactions and Measures Taken by Eigen Labs
In response to the controversy, Eigen Labs and the Eigen Foundation, which oversees the project, have taken measures to ban these token distributions to employees. In May, the company announced that it would no longer allow its employees to receive airdrops from ecosystem projects, seeking to prevent any conflicts of interest or the appearance of such conflicts. Additionally, Eigen Labs has introduced a policy to prevent any employee from influencing transactions for personal gain.
Broader Context in the Crypto Sector
The Eigen Labs case is part of a larger context where transparency and governance standards are still developing in the cryptocurrency sector. Unlike regulated public companies, crypto startups have greater freedom in managing and disclosing critical information, such as token distribution. This situation sometimes leaves investors with incomplete or misleading information about digital assets.
Eigen Labs’ practices have sparked mixed reactions. While some view these airdrops as a common practice in the crypto industry, others see it as a form of abuse of power. A crypto protocol founder, requesting anonymity, described these payments as ‘unusual’ even for the cryptocurrency sector. Other voices, such as Cessiah Lopez, a researcher affiliated with the University of Cambridge, have warned about the risks that these actions could pose to Eigen Labs’ proclaimed credibility and neutrality.
Tracking Transactions and CoinDesk’s Revelations
An in-depth investigation by CoinDesk has traced the transactions associated with Eigen Labs employees.
The identified wallets received the same number of tokens from three different airdrops: Ether.Fi, Renzo, and AltLayer. After reconstructing this list, CoinDesk was able to verify a majority of these addresses with internal sources close to Eigen Labs’ activities.
According to the analysis, each Eigen Labs employee received 46,512 ALT tokens from AltLayer, 10,490.9 ETHFI tokens from Ether.Fi, and 66,667 REZ tokens from Renzo. At their maximum value, these airdrops represented approximately $30,000 for AltLayer, $80,000 for Ether.Fi, and $16,666 for Renzo per employee.
On-chain data indicates that between late January and mid-June 2024, Eigen Labs employees claimed a total of 487,928 ETHFI tokens (with a maximum value of $3.5 million), 1,733,342 REZ tokens (with a maximum value of $433,300), and 1,539,563 ALT tokens (with a maximum value of $1.02 million). These figures illustrate the magnitude of airdrops received by employees, further raising concerns about potential conflicts of interest within the organization.
