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EigenLayer Airdrop Scandal Causes $351 Million TVL Plunge

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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?

EigenLayer TVL
EigenLayer TVL, Source: DefiLlama

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 ConditionsPrivacy Policy, and Disclaimers have been updated.



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XRP Price Sets the Stage for More Gains: Bulls Hold the Momentum

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Aayush Jindal, a luminary in the world of financial markets, whose expertise spans over 15 illustrious years in the realms of Forex and cryptocurrency trading. Renowned for his unparalleled proficiency in providing technical analysis, Aayush is a trusted advisor and senior market expert to investors worldwide, guiding them through the intricate landscapes of modern finance with his keen insights and astute chart analysis.

From a young age, Aayush exhibited a natural aptitude for deciphering complex systems and unraveling patterns. Fueled by an insatiable curiosity for understanding market dynamics, he embarked on a journey that would lead him to become one of the foremost authorities in the fields of Forex and crypto trading. With a meticulous eye for detail and an unwavering commitment to excellence, Aayush honed his craft over the years, mastering the art of technical analysis and chart interpretation.
As a software engineer, Aayush harnesses the power of technology to optimize trading strategies and develop innovative solutions for navigating the volatile waters of financial markets. His background in software engineering has equipped him with a unique skill set, enabling him to leverage cutting-edge tools and algorithms to gain a competitive edge in an ever-evolving landscape.

In addition to his roles in finance and technology, Aayush serves as the director of a prestigious IT company, where he spearheads initiatives aimed at driving digital innovation and transformation. Under his visionary leadership, the company has flourished, cementing its position as a leader in the tech industry and paving the way for groundbreaking advancements in software development and IT solutions.

Despite his demanding professional commitments, Aayush is a firm believer in the importance of work-life balance. An avid traveler and adventurer, he finds solace in exploring new destinations, immersing himself in different cultures, and forging lasting memories along the way. Whether he’s trekking through the Himalayas, diving in the azure waters of the Maldives, or experiencing the vibrant energy of bustling metropolises, Aayush embraces every opportunity to broaden his horizons and create unforgettable experiences.

Aayush’s journey to success is marked by a relentless pursuit of excellence and a steadfast commitment to continuous learning and growth. His academic achievements are a testament to his dedication and passion for excellence, having completed his software engineering with honors and excelling in every department.

At his core, Aayush is driven by a profound passion for analyzing markets and uncovering profitable opportunities amidst volatility. Whether he’s poring over price charts, identifying key support and resistance levels, or providing insightful analysis to his clients and followers, Aayush’s unwavering dedication to his craft sets him apart as a true industry leader and a beacon of inspiration to aspiring traders around the globe.

In a world where uncertainty reigns supreme, Aayush Jindal stands as a guiding light, illuminating the path to financial success with his unparalleled expertise, unwavering integrity, and boundless enthusiasm for the markets.



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Donald Trump Unaware of TRUMP Meme Coin’s Success

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In a press conference on January 21, US President Donald Trump responded to questions about his meme coin, TRUMP, admitting that he had limited knowledge of the token despite its market success.

His comments led to a brief dip in the token’s price, which subsequently rebounded.

Donald Trump Talks TRUMP Coin: Price Fluctuates

Speaking from the White House, Trump responded to inquiries about whether he was personally benefiting from the token, stating that he was unsure if he had profited from it.

The conference primarily focused on the announcement of a $500 billion investment in the “Stargate AI” artificial intelligence infrastructure project. President Trump was joined by OpenAI CEO Sam Altman, Oracle’s Chief Technology Officer Larry Ellison, and SoftBank CEO Masayoshi Son.

When asked about TRUMP, the President appeared uncertain about its details. 

“I don’t know where it is. I don’t know much about it other than I launched it, other than it was very successful,” Trump said.

Following his remarks, the token’s value briefly plummeted, prompting reactions from the financial community. Alex Krüger, founder of Aike Capital, highlighted the decline on social media platform X (formerly Twitter).

Bloomberg analyst James Seyffart also weighed in.

“Trump just nuked his own memecoin, Seyffart noted on X.

Despite the temporary setback, TRUMP quickly rebounded. At the time of reporting, it was trading at $41.24, reflecting a 15% increase in the past 24 hours.

Trump memecoin
TRUMP price performance. Source: CoinGecko

The meme coin’s market capitalization stood at $8.24 billion. This marked a notable increase as the token’s market cap dropped to $7.5 billion after inauguration day.

When informed that his token generated billions, Trump remarked, “Several billion … that’s peanuts for these guys,” gesturing toward the CEOs accompanying him.

The “Official Trump” token, launched last week, experienced a rapid surge of over 1,100%, rising from $6 to $75 within 36 hours. However, the ownership stake remains unclear, with two entities tied to the Trump Organization controlling 80% of the supply

Notably, the latest Forbes analysis debunked claims of a $58 billion windfall for Trump. The analysis highlighted that these estimates were based on the token’s fully diluted valuation, which factors in non-circulating tokens. With 800 million tokens locked, an 80% stake is estimated at $6.2 billion, though this figure is subject to market fluctuations.

Despite the volatility, the broader market has shown significant interest in meme coins. As BeInCrypto reported earlier, Rex Shares recently filed for meme coin exchange-traded funds (ETFs) that include TRUMP, BONK, and DOGE.

Meanwhile, meme coins stay true to their volatile nature, with TRUMP not being the only one experiencing sharp fluctuations. First Lady Melania Trump’s meme coin, MELANIA, hit an all-time high of $13 on January 20 but later dropped to around $4. 

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 ConditionsPrivacy Policy, and Disclaimers have been updated.



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Solana (SOL) Ignites New Momentum: Bulls Target Higher Ground

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Solana started a fresh increase above the $240 resistance. SOL price is back above $2500 and might aim for a fresh increase above the $262 zone.

  • SOL price started a fresh increase above the $240 and $250 levels against the US Dollar.
  • The price is now trading above $250 and the 100-hourly simple moving average.
  • There was a break above a key bearish trend line with resistance at $245 on the hourly chart of the SOL/USD pair (data source from Kraken).
  • The pair could start a fresh increase if the bulls clear the $262 zone.

Solana Price Reclaims $250

Solana price formed a base above $225 and started a decent upward move, like Bitcoin and Ethereum. SOL was able to climb above the $235 and $240 resistance levels.

There was a break above a key bearish trend line with resistance at $245 on the hourly chart of the SOL/USD pair. The pair even cleared the 50% Fib retracement level of the downward move from the $272 swing high to the $230 low.

Solana is now trading above $250 and the 100-hourly simple moving average. On the upside, the price is facing resistance near the $262 level or the 76.4% Fib retracement level of the downward move from the $272 swing high to the $230 low.

Solana Price

The next major resistance is near the $272 level. The main resistance could be $280. A successful close above the $280 resistance zone could set the pace for another steady increase. The next key resistance is $292. Any more gains might send the price toward the $300 level.

Another Decline in SOL?

If SOL fails to rise above the $262 resistance, it could start another decline. Initial support on the downside is near the $250 zone and the 100-hourly simple moving average.

The first major support is near the $240 level. A break below the $240 level might send the price toward the $230 zone. If there is a close below the $230 support, the price could decline toward the $215 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 – $250 and $240.

Major Resistance Levels – $262 and $272.



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