Eigenlayer Reveals New Token EIGEN, with Diverse Applications and Enhanced Security
Summary:
Eigenlayer, the Ethereum staking protocol, has proposed a new token called EIGEN, according to a white paper published on April 29. EIGEN token is designed for apps that require user-subjective agreement, like prediction markets and storage services. Unlike separate tokens, EIGEN allows Eigenlayer to leverage Ethereum's security. The paper also describes EIGEN as a universal work token with possible applications including prediction markets, cloud microservices, and AI training. Reportedly, 15% of the total EIGEN supply has been assigned to users who have restaked Ether through Eigenlayer. However, an impending airdrop may not include certain regions such as the US, Canada, and parts of Africa, Asia.
On April 29, Eigenlayer, the staking protocol for Ethereum, published a white paper introducing its new token named EIGEN. EIGEN is designed for applications that require agreement subjective to the user, such as prediction platforms, storage offerings, and gaming systems, as highlighted in the white paper. Certain regions, including the US and Canada, will not be eligible for the forthcoming airdrop. Eigenlayer operates as a blockchain network utilizing staked Ether (ETH) as its original coin. Ethereum's staked Ether holders have the ability to restake their assets on Eigenlayer and receive extra staking returns by approving transactions across both chains. The developers argue this design is safer than having a separate token, letting Eigenlayer leverage Ethereum's security without needing to start from scratch.
The recent white paper reveals that staked Ether will persist in establishing consensus for chain-verifiable data, like transaction validity. Certain data cannot be chain-confirmed as true or false, yet can still be validated easily by individuals. For example, confirming the incorrectness of the statement "1 BTC (Bitcoin) equals 1 USD (US Dollar)" is possible using off-chain data available to anyone. Eigenlayer states that EIGEN will be valuable in building consensus for such statements, labeling them as "statements having a high degree of agreement with faults attributable to intersubjective perspectives."
The creation of the EIGEN is a continuation of work previously done by Augur, which devised the REP token to acknowledge intersubjective agreements. The paper notes, however, that while REP was designed specifically for prediction markets, EIGEN aims to be a multifaceted intersubjective agreement token with wider operational scope. Furthermore, according to the developers, EIGEN can be separated from decentralized finance (DeFi) apps in the event of a fork, can assist in calculating social consensus costs, and can reimburse users who lose EIGEN due to errors.
With these characteristics, the team believes EIGEN can serve as a "universal work token" for tasks that cannot be objectively attributed. They provided a list of potential uses of the token, including, but not limited to, prediction markets, storage offerings, gaming systems, cloud microservices, and artificial intelligence (AI) training.
As per Eigenlayer's internal documents, 15% of the total EIGEN supply has already been assigned to existing users who have restaked ETH through the platform. These tokens were reserved after a snapshot was taken on March 15. An extra 15% will be distributed to participants in "Season 2," which started immediately after the snapshot. The end date for Season 2 remains undisclosed.
After the release of the white paper, DeFi Made Easy, a cryptocurrency trader and X user, hypothesized that Eigenlayer might be planning to airdrop the new token to its users. As proof, they pointed to a "claims" webpage the Eigenlayer team had presumably created. The webpage, however, produces a 404 error when accessed from a US IP address or any of several European virtual private network (VPN) server addresses. Crypto trader Wazz stated that the airdrop does not cover "the USA, Canada, half of Africa and Asia and VPN users."
An anonymous developer, Chudnov, hinted on April 22 that Eigenlayer could be on the brink of a "yield crisis" due to the assets locked on its platform growing faster than what is required to ensure network security. As per reports from QuickNode and Artemis on April 18, restaking on Eigenlayer has been a major contributor to the inflow of new assets to the DeFi ecosystem.
Published At
4/29/2024 11:00:00 PM
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