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What is $EIGEN? A Guide to EigenLayer’s Protocol Token and Airdrop

What is $EIGEN_ A Guide to EigenLayer’s Protocol Token and Airdrop

The staking landscape continues to evolve, and EigenLayer is the latest to lead the pack. With its introduction of Restaking, and now a groundbreaking token, dubbed as the "Universal Intersubjective Work Token," EigenLayer is poised to redefine staking and cryptoeconomic security. Slated for release in May 2024, this token promises to facilitate a wider range of digital tasks across blockchain networks, transcending the traditional constraints of specialized and objective work tokens like ETH. EigenLayer's approach enables the token to operate universally across various digital tasks while embracing a unique mechanism for addressing intersubjective faults—a method where the resolution relies on the broad consensus among observers rather than hard-coded conditions.

This initiative marks a significant pivot from EigenLayer's previous focus exclusively on Ethereum restaking to a more expansive role that includes actively validated services (AVSs) and other blockchain functionalities. By integrating a forking mechanism at the application layer, EigenLayer enhances its protocol to not only penalize but also compensate users, ensuring robust participation and fostering a secure digital commons. This approach supports Ethereum’s existing infrastructure and pioneers new avenues for digital cooperation and trust without the centralized intermediaries traditionally required. More details on the critical features are below.

Intersubjective Fault Resolution

Traditional blockchain systems primarily rely on objective consensus mechanisms, where data or actions must be clearly valid or invalid based on programmatic proofs. However, certain scenarios, termed as intersubjective faults, involve situations that aren’t as black-and-white, requiring a form of social consensus for resolution. The following chart describes these two paradigms:

Figure 1: The X-axis represents the agreement or consensus among validators regarding the nature of a fault. The Y-axis represents the breadth of faults that can be verified and resolved within existing network protocols and mechanisms. Source: EIGEN Whitepaper

Intersubjective faults are those where consensus on an event’s validity can vary based on observers’ perspectives rather than cryptographic proof alone. This is critical in scenarios where automated mechanisms may fail to capture the full context of transactions or actions, such as complex contract interactions or subjective moderation policies.

EigenLayer introduces a method to handle such faults by allowing network participants to engage in a social consensus process. This process involves participants voting or agreeing on the outcome of ambiguous situations, with the network's protocol ensuring that the majority’s view is recorded and enforced on-chain.

Expansion Beyond Ethereum

EigenLayer was initially conceived to augment Ethereum’s staking mechanisms but is now poised to extend its utility across various blockchain operations.

By using restaking, EigenLayer allows the same natively staked Ethereum (ETH) to be utilized for multiple tasks across different platforms and applications without needing to design new security mechanisms or validator sets. This is achieved through a layered architecture where ETH staked on Ethereum can simultaneously secure other blockchains or protocols by leveraging EigenLayer’s restaking mechanism.

The expansion allows for greater fluidity and utility of staked assets, broadening the scope from mere transaction validation to supporting a variety of decentralized applications (dApps) and services like oracle networks, data availability layers, and more.

Incentivization Through Slashing Mechanisms

To maintain network integrity and discourage malicious activities, EigenLayer employs an advanced slashing mechanism.

Slashing in blockchain contexts generally refers to the penalty imposed on validators for actions detrimental to network health, such as double signing or validator downtime. EigenLayer’s approach expands on this by introducing penalties for intersubjective faults as well, where validators might be punished not just for clear-cut protocol violations but also for actions that could harm the network’s subjective integrity.

This system leverages a cryptoeconomic model that aligns validator incentives with overall network health, promoting a more robust and self-regulating platform. Validators are incentivized to act in the best interest of the network, knowing that failing to do so could result in significant financial losses.

Forking and Compensation Protocols: EIGEN vs bEIGEN

One of the unique aspects of EigenLayer is its forking mechanism, designed to handle disputes and network upgrades without centralized control.

Forking in EigenLayer is not just a technical response to software upgrades or splits, but also a governance tool for resolving disputes within the network. This is particularly relevant for addressing intersubjective faults where community consensus can lead to the creation of new branches of the protocol. The EIGEN token is unaware of forks, and is more or less the “standard token” targeted for traditional DeFi usage. However, the bEIGEN “staking token” is aware of these new forks, and these holders will be governing the canonical state of EigenLayer. bEIGEN will manage the dispute resolutions across various AVS networks on the protocol. An overview of this model is represented in the diagram below:

Figure 2: The Two Token Model as described in EigenLayer’s EIGEN whitepaper.

Furthermore, EigenLayer’s protocol is designed to not only penalize wrongdoing through slashing but also to compensate affected parties. This compensation mechanism is crucial for maintaining trust among participants, as it ensures that those negatively impacted by faults or disputes are made whole.

So, How do I claim the $EIGEN airdrop?

Users who are eligible can begin claiming on May 10, 2024 for up to 120 days. Critically, the token will also be non-transferable upon claiming for a period of time lasting until late September 2024.

March 15th, 2024 was the snapshot date for EigenLayer protocol participants, with an additional 100 $EIGEN tokens offered to over 280,000 users. This additional distribution was made to address criticisms about the initial allocation allegedly favoring whales, and will increase accessibility of the token for early adopters. The number of new tokens distributed to users amounts to 28 million, on top of the initial allocation of 83.5 million tokens (or, about 6.67% of the total token supply for the first season). The tokens allocation will be offered by the non-profit Eigen Foundation to users, subject to certain conditions. $EIGEN token claims cannot be made from restricted countries or VPN users. Under “ELIGIBILITY” in the airdrop ToS, section b, you can identify if your region is subject to the claim restrictions.

You can also use a free tool offered by DefiLlama to check if your crypto address is eligible for any token claims, via Click on “Check airdrops for address” to see if your wallet qualifies without accessing the EigenLayer interface.  To get involved as a restaker on EigenLayer’s mainnet, check out our previous tutorial post on the subject here:

The Validation Cloud team is a proud supporter of, and operator for the EigenLayer protocol. As an early partner throughout testnet and now mainnet, our team operates for, AltLayer MACH, Omni Network, and Xterio Mach. To date, Validation Cloud has successfully onboarded roughly 60,000 restaked ETH on EigenLayer as part of our partnership with EtherFi. To learn how to restake on EigenLayer, check out our guide here.

About Validation Cloud

Validation Cloud is a Web3 data streaming and infrastructure company that connects organizations into Web3 through a fast, scalable, and intelligent platform. Headquartered in Zug, Switzerland, Validation Cloud offers highly performant and customizable products in staking, node, and data-as-a-service. Learn more at LinkedIn | X