CoinDesk scoop: EigenLayer allows employees to receive ecological airdrops, "receiving red envelopes" to profit millions of dollars

The highly anticipated Ethereum re-staking project, EigenLayer, has recently sparked significant attention due to allowing employees to benefit from airdrops. A CoinDesk investigation revealed that this crypto startup company allowed employees to profit from airdrops, raising not only questions about potential conflicts of interest but also scrutiny on internal reward ethics in the decentralized finance (DeFi) sector.

Is EigenLayer, the Mainstay of Re-pledging, Free from Conflict of Interest?

Developed by Eigen Labs, EigenLayer aims to provide a "trusted neutrality" platform to protect blockchain applications from network threats and theft attacks.

Despite claiming to maintain neutrality, a deeper investigation revealed that employees have reaped substantial benefits, amounting to millions of dollars, from projects relying on EigenLayer technology.

CoinDesk reports that this raises a classic ethical dilemma: Can a project remain neutral when insiders profit economically from external projects?

Internal Ecosystem Airdrop: Appreciation or Pressure?

The controversy lies in Eigen Labs sharing employees' wallet address lists with projects within its ecosystem.

Some projects claim the airdrops were a gesture of appreciation to Eigen Labs employees, while others see it as a form of subtle pressure. A developer revealed that Eigen Labs provided the list without request, implying that not participating in the airdrop could potentially impact the collaboration with the startup company.

Airdrop Bonanza Brings Wealth to Employees

At its peak, Eigen Labs employees received tokens worth nearly $5 million from various projects, including Ether.Fi, Renzo, and AltLayer. Individual employees made up to $80,000 in profits. Despite fluctuations in token value, the rewards were still substantial, as revealed by the investigation.

Ethical Impact and Industry Response

The crypto community has mixed views on the ethical issues surrounding these payments. Some believe airdrops are a common and reasonable form of compensation in the decentralized space, especially as a reward for contributors. However, critics point out that direct payments to individual employees rather than the company itself, particularly when these employees hold influence over projects within the EigenLayer ecosystem, have crossed ethical boundaries.

Crypto Companies Not Required to Disclose Financial Reports, Posing Numerous Issues

A key issue lies in the lack of unified reporting standards within the crypto industry. Unlike traditional publicly listed companies that must disclose detailed equity ownership, crypto startups face less regulatory pressure.

While projects like AltLayer disclosed their token distribution, others like Renzo and Ether.Fi vaguely categorized payments as rewards for "ecosystem partners," without specifying payment details to Eigen Labs employees.

In fact, crypto companies, despite having tokens similar to stocks, raising funds through them, and trading them on the market, do not need to disclose as mandated by regulations for traditional publicly listed companies, providing them considerable operational leeway.

Eigen Bans "Red Envelope" Practice Only in May This Year

Amid increasing external pressure, Eigen Labs and Eigen Foundation have implemented several reforms. In May this year, the company prohibited employees from participating in airdrops due to concerns over conflicts of interest. Additionally, the company introduced rules prohibiting employees from influencing trades for personal gain and implemented an insider trading blackout period to prevent the misuse of insider information.

Following suit, Eigen Foundation also followed up, prohibiting employees from receiving airdrops and openly acknowledging the need to maintain trust and transparency.

However, employees who have benefited from past airdrops are not required to return the tokens.

Widespread Issue: Lack of Industry Norms

This incident highlights the lack of ethical standards in the rapidly evolving crypto space. While Eigen Labs has taken steps to address the controversy, it exposes the gap between blockchain's promise of transparency and the conflicting interests of insiders. As the industry matures, establishing clearer guidelines and sound disclosure practices will be crucial to maintaining trust in decentralized ecosystems.

Another Case: Exchange Employees Engage in "Red Envelope" Culture

As long as there are "human windows," the phenomenon of "red envelopes" seems hard to avoid. Despite EigenLayer being an on-chain protocol, Eigen Labs is ultimately a centralized company. In the crypto industry, instances of exchange employees receiving red envelopes or engaging in insider trading are not uncommon, indicating that despite blockchain being a decentralized architecture, behind-the-scenes behaviors caused by personnel are still prevalent in the business market. For large exchanges, business personnel responsible for dealing with VIP clients have previously requested "private payments" from trading users to pass verification, leveraging their authority to grant "discounted fees," a practice that trading users are usually willing to engage in for long-term benefits.

The case of Eigen Labs serves as a reminder that even in a world built on transparency and decentralization, the potential for internal personnel to benefit and conflict of interest remains. As crypto technology continues to push boundaries, the industry must strike a balance between innovation and ethical responsibility to ensure that the next generation of blockchain projects can fulfill their proclaimed ideals.