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Tokenomics

EIGEN Token Model: Will it Work?

Nikhil Chaturvedi
Kunal Goel
Seth Bloomberg

May 3, 2024 ⋅  11 min read

EigenLayer, an Ethereum restaking protocol, has launched the EIGEN token, distributed through a stakedrop to its community, sparking widespread interest and debate. The protocol has secured substantial funding and a total value locked (TVL) in the billions, influencing the Liquid Restaking Token (LRT) market significantly. Despite the potential, the recent release of its whitepaper detailing the token's design and distribution has divided opinions, raising concerns about its long-term viability and effectiveness. EigenLayer's innovative approach utilizes Ethereum's security for other applications without fragmenting it, introducing a new token model that includes Universal Objective and Intersubjective Work Tokens, aiming to enhance Ethereum's scope beyond just securing its own blockchain. This dual-token system also includes mechanisms for managing intersubjective faults and decentralizing decision-making, albeit with some skepticism regarding the actual demand and effectiveness of such a model.

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Nikhil Chaturvedi
NikhilChatu

Nikhil is a Researcher focused on Web3 Infrastructure and Decentralized AI. Previously he was leading BD at Upshot and prior to that was working on growing Avalanche at Ava Labs.

Kunal Goel
kunalgoel

Kunal previously worked in equity research and now considers himself a financial analyst in crypto. He specializes in valuation and bottom-up analysis for Layer-1 and DeFi protocols because he has yet to learn of a way to value NFTs.

Seth Bloomberg
bloomberg_seth

Prior to joining Messari, Seth worked in traditional finance software and services, and has a MSc in Applied Mathematics. Seth is a Senior Research Analyst on the Enterprise Research team, and focuses on infrastructure, verifiable compute, and the AI x Crypto intersection.

Mentioned in this report

About the authors

Nikhil Chaturvedi

Nikhil is a Researcher focused on Web3 Infrastructure and Decentralized AI. Previously he was leading BD at Upshot and prior to that was working on growing Avalanche at Ava Labs.

Kunal Goel

Kunal previously worked in equity research and now considers himself a financial analyst in crypto. He specializes in valuation and bottom-up analysis for Layer-1 and DeFi protocols because he has yet to learn of a way to value NFTs.

Seth Bloomberg

Prior to joining Messari, Seth worked in traditional finance software and services, and has a MSc in Applied Mathematics. Seth is a Senior Research Analyst on the Enterprise Research team, and focuses on infrastructure, verifiable compute, and the AI x Crypto intersection.

Mentioned in this report