TL;DR
- EigenLayer faces a crisis after receiving over 12,000 withdrawal requests due to the exclusion of participants from certain regions in its upcoming airdrop.
- The decision to limit participation in the airdrop has caused discontent among users and led to a drop in the total value locked in the protocol.
- Karak protocol emerges as a promising alternative with a 20.5% growth in its TVL.
EigenLayer, one of the largest restaking protocols on the Ethereum network, is undergoing a complex crisis after receiving over 12,000 withdrawal requests in recent days. The massive exodus of funds began on April 29 after the protocol announced the exclusion of participants from the United States, Canada, and several African and Asian countries from its upcoming EIGEN token airdrop.
Protocol’s decision to limit participation in its airdrop has sparked a wave of discontent among users, resulting in a sharp decline in the total value locked (TVL) in the protocol. According to Dune data, over 11.6% of EigenLayer’s unique depositors have requested to withdraw their funds in the last three days, which could result in a significant decrease in the protocol’s TVL.
The CEO of EigenLayer, whose name has not been publicly disclosed, lamented the situation and noted that the exclusion of certain jurisdictions from the airdrop was a necessary measure to comply with local regulations. However, he acknowledged that the community’s reaction has been more intense than expected and assured that the team is working to mitigate the effects of this situation.
Karak Emerges as an Alternative to EigenLayer
On the other hand, Anndy Lian, an intergovernmental blockchain expert, warned that the exclusion of participants from certain regions could have a lasting impact on EigenLayer’s TVL. Lian argues that users from these regions may have contributed significantly to EigenLayer’s TVL, and their exclusion could lead to a permanent loss of funds.
Meanwhile, the restaking protocol Karak is growing leaps and bounds amid EigenLayer’s crisis. With a 20.5% increase in its TVL over the past week, it is shaping up as a solid competitor. According to Lian, Karak offers unique technical features and more flexible restaking tokens, which could attract disgruntled EigenLayer users in search of more reliable alternatives.
