EigenLayer is in hot water after admitting to not fully disclosing how it allocated its insider tokens. The platform launched its token on Oct 1st, and after seeing an initial price surge, the value dropped by 22%.
When EigenLayer launched in April, it secured substantial investments, including $100 million from Andreessen Horowitz and others. The company has previously announced its goal to compete with Lido, the largest liquid restaking protocol on Ethereum.
The shaking platform initially promised that a majority of the EIGEN token supply would be locked for at least a year, with a portion set aside for early investors and contributors. Specifically, 29.5% of the total supply was allocated to early investors, while 25.5% was designated for contributors.
The platform claimed that the tokens were under a “full lock” agreement, meaning that insiders would not be cashing out rewards. However, it has come to light that these insiders have been able to access their rewards.
EigenLayer acknowledged in an announcement on X that early investors could sell the rewards generated from their locked token. This, however, contradicts the earlier promise of a “full lock”.
This has made its community members spark frustrations, as they believed that the locked tokens should not yield rewards that can be traded.
Despite anger towards the VC’s, traders remained optimistic towards the token. EIGEN, has made a strong market debut following its unlock on October 1, 2024
At the time of writing, the token is trading for $3.34, a 15% drop in the last 24 hours after spiking to $4.44 when it was launched. The marketcap of EIGEN stands at $624,124,457 and ranks 85th,
Also Read: EigenLayer’s EIGEN Token Debuts, Surges into Top 100 Rankings
