EigenLayer (EIGEN) Crash 20% after Listing, What's the Reason?
EigenLayer (EIGEN) plunged 20% after listing on Binance, amidst sharp attention regarding transparency issues which made investor confidence fade.
Criticism focused on the locked token staking rules, which were deemed not clear enough, resulting in network growth plummeting by 91%.
If EIGEN fails to defend the support level at US$3.75, further downside is possible amid fragile market sentiment.
EigenLayer was previously in the limelight ahead of the listing of their native token, EIGEN. However, after the official listing, EIGEN became the topic of conversation again, but this time for different reasons. The network's developer, Eigen Labs, has drawn criticism for a lack of transparency regarding their token staking process.
, where investors have received permission to stake tokens that are still in locked status. Unfortunately, this was not conveyed openly by Eigen Labs, but was only included in their update document.
This controversy then sparked a big protest from the community, so Eigen Labs provided clarification on Wednesday (2/10).
âInvestors are permitted to stake both EIGEN and non-EIGEN assets on EigenLayer. Contracts with investors require that they be allowed to stake EIGEN, and any rewards received will be unlocked. The maximum amount that all EIGEN stakers can get each year is 1% of the total initial EIGEN supply. These can be claimed on a weekly basis and take a year to release linearly. This 1% includes all EIGEN stakers, including investors," Eigen Labs wrote in a statement."
