Market
EigenLayer Airdrop Scandal Causes $351 Million TVL Plunge
Eigen Layer, a leading restaking protocol on Ethereum (ETH), saw at least $351 million worth of capital ooze out in the last 24 hours.
The drop follows shocking revelations about the protocol’s airdrop policy, with EigenLayer coming to its own defense.
EigenLayer Airdrop Policy Controversy
Users on X (formerly Twitter) were abuzz on Thursday following reports that Eigen Labs extorts millions of dollars in airdrop tokens from projects looking to launch protocols on their platform, EigenLayer.
Renzo, AltLayer, and ether.fi are reportedly among the projects affected by an arrangement where portions of their new tokens are set aside as a “thank you” for Eigen Labs and Eigen Foundation employees. Allegedly, in exchange for smooth operations on the restaking protocol, Eigen Labs provides employee wallet addresses whenever a project announces an airdrop, requesting reward tokens.
These tokens are supposedly intended to secure successful exchange listings, with estimated “bribes” totaling nearly $5 million. Each employee is said to receive an average of $80,000 as part of this arrangement.
Read more: What Is Liquid Staking in Crypto?
Some say Eigen Labs’ actions are warranted, as they align the interests of both parties, but call for more transparency.
“Curve functions essentially on bribes. If you want to go down that semantic path. But IMO bribery is essentially implicit corruption. A payment to neglect codified duties. Protocols exchanging tokens or issuing them to actors to align their fates are different,” one user said.
However, others challenge the perspective, calling out project leaders for unethical fraud and greed.
“This is why crypto market participants are more interested in memecoins now more than ever over “utility” tokens. The unethical fraud conducted by, and greed in the leadership of some of these companies is undeniable,” another user stated.
As BeInCrypto reported, Ethereum Foundation’s Justin Drake came in as EigenLayer advisor in May amidst another bribe controversy. This inspired a new policy, including the “prohibition on team members accepting airdrop tokens or selling airdrop tokens” to “ensure trust, transparency, and avoid conflicts of interest.”
The Team Defends Extortion Claims
In its defense, EigenLayer published a blog denying “knowledge or evidence of any employee at Eigen Labs pressuring any team to unduly benefit the Eigen Labs corporate entity or its employees.” The protocol also articulated having mitigated any incentive misalignment for Eigen Labs employees in May. The protocol’s position is that Eigen Labs employees have not received airdrops since the May changes.
“We realized that airdrops to employees may create misaligned incentives and updated our internal policies in May so that if projects wanted to airdrop to Eigen Labs in the future, it could only go to the company,” EigenLayer explained.
Despite the explanation, the EigenLayer restaking protocol still suffered a loss of $351 million in total value locked (TVL). Data from DefiLlama shows a sharp decline from $12.653 billion to $12.302 billion between Thursday and Friday.
Read more: Ethereum Restaking: What Is It And How Does It Work?
A drop in TVL typically indicates users are withdrawing funds from the platform, which can lead to reduced liquidity, popularity, and usability — key factors for a project’s success. A higher TVL reflects more capital locked in DeFi protocols, offering participants greater benefits and returns. Conversely, a lower TVL signals limited funds and reduced yields.
Despite this decline, EigenLayer remains dominant in Ethereum restaking. In Q2 2024, restaking on EigenLayer surged by 36%, with 4.3 million ETH restaked. Liquid Restaking Protocols (LRTs) accounted for most of this, holding 2.28 million ETH.
The appeal of restaking isn’t limited to Ethereum. As BeInCrypto previously reported, Jito, a liquid staking protocol on Solana, also introduced its own restaking services.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Market
Polymarket Faces Ban in France as US Election Betting Ends
According to a report from The Big Whale, the National Gaming Authority (ANJ), France’s gambling regulator, is preparing to block the prediction markets platform Polymarket.
Polymarket, the decentralized platform that allows users to bet on the outcome of political events, sports, and other occurrences using cryptocurrency, has gained popularity in recent months, especially with bets surrounding the US presidential election. More than $3.2 billion was reportedly wagered on the platform during this high-stakes period, with a record-breaking $294 million in volume on November 5 alone.
France Users May No Longer Access Polymarket
According to The Big Whale, a French website that covers the crypto industry, the ANJ’s impending ban comes after a French trader placed a $30 million bet on a Trump victory, reportedly attracting the regulator’s scrutiny.
The trader’s wager positioned him to make approximately $19 million in profits, a sum that has intensified concerns over Polymarket’s compliance with French gambling laws. A source close to the ANJ stated that despite Polymarket’s use of blockchain and cryptocurrency, its activities are akin to gambling, making it subject to restrictions under French law.
“We are aware of this site and we are currently examining its operation as well as its compliance with French gambling legislation,” The Big Whale reported, citing an ANJ spokesperson.
Read more: What is Polymarket? A Guide to The Popular Prediction Market
Legal expert William O’Rorke from ORWL Avocats explained that although Polymarket does not specifically target French users, its activities fall squarely under gambling regulations.
“Polymarket involves betting money on uncertain outcomes, which aligns with the legal definition of gambling,” O’Rorke noted.
Against this backdrop, the ANJ is well within its mandate to block the platform’s access in France. Accordingly, the French regulator may enforce the ban by blocking Polymarket’s domain name in France. It amy also pressure third-party players, like media outlets and online directories, to limit access to Polymarket links.
However, French users may still circumvent this by using virtual private networks (VPNs). This is because Polymarket’s crypto-based infrastructure allows for relatively anonymous participation.
France’s looming ban is not the first regulatory roadblock Polymarket has encountered. In 2022, the US Commodity Futures Trading Commission (CFTC) fined Polymarket $1.4 million for failing to register as a designated contract market. The CFTC also challenged Kalshi’s operations due to questions about betting on political events.
Polymarket’s Fate After US Elections
Meanwhile, the US election was a significant catalyst for Polymarket. It drove the platform to new heights in user engagement and bet volume. Polymarket’s election-related markets have been featured on major financial platforms, including Bloomberg, highlighting the platform’s appeal to mainstream finance.
As BeInCrypto reported, Polymarket’s election betting topped $3 billion, reflecting unprecedented participation. The platform, however, faces a crossroads in its path forward. Following the climax of the US election on Wednesday, data from Dune Analytics shows a steep decline in Polymarket’s activity.
Daily active addresses and transaction volumes, which soared in the election lead-up, have notably dwindled as election-related betting winds down. For instance, Polymarket’s open interest, a key indicator of active betting engagement, dropped from $350 million to $268 million after the polls closed. Similarly, monthly new accounts have also dropped by over 41% between October and November.
Against this backdrop, Polymarket may need to diversify its market offerings or potentially embrace a new model to maintain user interest. This is considering election-related activity comprised the majority of the prediction market’s volume.
Rumors are circulating about a potential move toward a decentralized governance token, which could distribute control over Polymarket’s operations to its community. This shift would reduce the liability of the central authority by decentralizing decision-making, though it remains theoretical, with no clear timeline.
Read More: How To Use Polymarket In The United States: Step-by-Step Guide
Polymarket’s fast ascent and regulatory challenges highlight broader industry tensions between innovation and compliance. With election predictions no longer a draw and an impending ban in France, Polymarket’s future remains uncertain.
Its long-term viability may depend on how well it adapts to evolving regulatory landscapes and whether it can maintain popularity beyond election season peaks.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Market
XRP Price Ready to Rally? Signs Point to a Bullish Move
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Market
Solana (SOL) Rallies Strongly, Setting Sights on $200
Solana started a fresh increase above the $172 support zone. SOL price is rising and might soon aim for a move toward the $200 level.
- SOL price started a fresh increase after it settled above the $165 level against the US Dollar.
- The price is now trading above $172 and the 100-hourly simple moving average.
- There was a break above a key bearish trend line with resistance at $162 on the hourly chart of the SOL/USD pair (data source from Kraken).
- The pair could continue to rise if it clears the $192 resistance zone.
Solana Price Starts Fresh Rally
Solana price formed a support base and started a fresh increase above the $162 level like Bitcoin and Ethereum. There was a strong move above the $165 and $172 resistance levels.
There was a break above a key bearish trend line with resistance at $162 on the hourly chart of the SOL/USD pair. The price even cleared the $185 level. A high is formed at $192 and the price is now consolidating gains. It is trading above the 23.6% Fib retracement level of the upward move from the $155 swing low to the $192 high.
Solana is now trading above $172 and the 100-hourly simple moving average. On the upside, the price is facing resistance near the $192 level. The next major resistance is near the $195 level.
The main resistance could be $200. A successful close above the $200 resistance level could set the pace for another steady increase. The next key resistance is $212. Any more gains might send the price toward the $220 level.
Another Dip in SOL?
If SOL fails to rise above the $192 resistance, it could start a downside correction. Initial support on the downside is near the $188 level. The first major support is near the $180 level.
A break below the $180 level might send the price toward the $172 zone or the 50% Fib retracement level of the upward move from the $155 swing low to the $192 high. If there is a close below the $172 support, the price could decline toward the $165 support in the near term.
Technical Indicators
Hourly MACD – The MACD for SOL/USD is gaining pace in the bullish zone.
Hourly Hours RSI (Relative Strength Index) – The RSI for SOL/USD is above the 50 level.
Major Support Levels – $188 and $185.
Major Resistance Levels – $192 and $200.
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