Why EigenLayer Gave Away More Tokens After Widespread Criticism of Its Stakedrop - Ep. 640
May 3, 2024
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Sreeram Kannan, the visionary founder and CEO of EigenLayer, teams up with Robert Drost, the dedicated CEO of the Eigen Foundation, to discuss the recent launch of the EIGEN token. They dive into the mechanics of a universal intersubjective work token, designed to boost decentralized applications through innovative slashing techniques. Addressing community concerns, they outline their decision to redistribute tokens for fairness and inclusivity, emphasizing the importance of transparency and shared governance in the evolving crypto landscape.
Eigen token promotes intersubjective work token for decentralized governance.
Emphasis on open verifiable digital commons with Eigen token penalties for security.
Eigen layer allows forkable tokens to facilitate decentralized governance decisions.
Deep dives
Eigen Token and Intersubjective Work Token Design
The podcast episode delves into the concept of the Eigen token, highlighting its purpose as a shared belief within the Eigen layer ecosystem. The episode discusses the establishment of the Eigen token as an intersubjective work token, aiming to promote open innovation and allow for the creation of decentralized protocols without the need to bootstrap trust and community. The core idea behind Eigen layer involves enabling ETH staking to support various actively validated services (AVSs) that can leverage the trust provided by ETH staking. Additionally, the episode addresses the importance of intersubjective consensus in creating clear setup phases for protocols to avoid conflicts like those seen in historical events like the DAO hack.
Open Verifiable Digital Commons and Shared Security Commons
The podcast episode outlines Eigen layer's vision for an open verifiable digital commons, emphasizing principles of openness and verifiability within the decentralized platform. The episode discusses the concept of shared security commons, highlighting the importance of allowing equal participation and ensuring accountability among those entrusted with maintaining the commons. Eigen layer's goal is to establish a decentralized, permissionless platform where users can govern and innovate without restrictions, fostering trust and transparency through verifiability and inclusivity. The episode showcases the role of Eigen token in enforcing penalties on malicious actors and maintaining the integrity of the digital commons.
Forkability and Decentralized Governance
The podcast episode explores the concept of forkability within the Eigen layer protocol, emphasizing the ability to fork tokens rather than the entire chain. It delves into the implications of forking tokens, highlighting the necessity of burning tokens to compensate for social consensus evaluation and mitigate the social cost of evaluating forks. The episode discusses the role of Eigen token in enabling forkability and fostering decentralized governance by allowing users to make individual choices on forking and maintaining control over the protocol's direction. The discussion also addresses the importance of clear setup phases in intersubjective systems to prevent conflicts and ensure transparent decision-making.
Stake Drop Dynamics and Community Engagement
The podcast episode addresses the dynamics of the Eigen layer stake drop, focusing on aspects such as linear distribution models, token slashing for faults, and transfer restrictions for community protection. It highlights the challenges faced by new token launches, including sharp declines post-airdrops and the impact of market downturns on token valuations. The episode discusses community feedback on stake drop mechanisms, emphasizing the importance of empowering users and aligning incentives to ensure fair distribution and decentralized control. Additionally, it touches on efforts to engage the community through additional token allocations and transparency measures.
Future Developments and Season 2 Expectations
The podcast episode provides insights into future developments and expectations for Eigen layer's Season 2, focusing on upcoming features such as staking for Eigen tokens, operator delegation, and AVS integration. It highlights the importance of launching payments, intersubjective slashing mechanisms, and fostering decentralized governance within the protocol. The episode discusses the potential of Eigen layer in expanding the crypto ecosystem, offering innovative solutions for decentralized trust as a service and promoting open innovation through shared security commons. It concludes by outlining the roadmap for further engagement, community empowerment, and technological advancements in Season 2.
EigenLayer has been in the news this week after it announced its ‘stakedrop,’ where it will distribute EIGEN tokens to early users of the restaking platform.
Sreeram Kannan, founder and CEO of EigenLayer, and Robert Drost, CEO and executive director of the Eigen Foundation, discuss the launch of the token, a “universal intersubjective work token” and how it allows for slashing, or penalizing, for externally observable faults, such as data unavailability. The Eigen Foundation, a non-profit entity based in the Cayman Islands, was also recently established to grow the protocol and assist in creating a decentralized community.
They also address criticisms of the token's launch, including geoblocking and the initial non-transferability of stakedrops for the community and explain why they decided to allocate an additional 100 EIGEN tokens for all participants in the stakedrop. Plus, they reveal a target date by when a decision about the token unlock date should be made.
Show highlights:
The buzz around the universal intersubjective work token and what it was created for
What constitutes the digital commons and its two primary characteristics
How the EIGEN token is designed to prevent the necessity of forking an entire blockchain
Whether dapps should evolve into AVSes and EigenLayer’s complementary role to Ethereum, not replacing it
Why the Eigen Foundation was established and how it differs from Eigen Labs
Robert's response to the criticism regarding the exclusion of certain countries
Why EIGEN will be distributed linearly, despite it potentially favoring whales
EigenLayer's announcement of an updated stakedrop, after listening to community feedback
The critique of the vesting schedule and Robert's explanation of when the lock period actually starts
Why Sreeram believes that transfer restrictions are beneficial and empowering for users
