EIGEN Tokenomics and EigenLayer Advantages

Bittime - As a project that is currently receiving a lot of attention, both the EIGEN token and the EigenLayer project itself offer interesting features.

Do you understand EIGEN tokenomics and what are the advantages of EigenLayer?

If not, then you are in the right article.

What is EIGEN Token?

The EIGEN token is a token product created based on research conducted by Eigen Labs.

The EIGEN token is designed according to fundamental principles to support the EigenLayer ecosystem as a complement to ETH restaking.

ETH restaking provides a way to punish mistakes that can be measured objectively, by extending Ethereum's security to other protocols. 

The EIGEN token introduces additional mechanisms specifically designed to handle “intersubjective” errors, a type of error that cannot be resolved simply by restaking ETH. 

Intersubjective wrongdoing refers to bad behavior that cannot be objectively identified in the chain, but where two or more rational observers would agree that punishment for a wrongdoing or violation is warranted.

EIGEN Tokenomics and it's Allocation

Based on EIGEN tokenomics data quoted from icoanalytics.org above, the total supply of EIGEN tokens is 1.68 billion. 

Currently, EIGEN's market capitalization value reaches $669.19 million. 

Additionally, the fully diluted valuation, which takes into account the entire supply of tokens if they were all circulating on the market, stands at $6.03 billion.

EIGEN Token Allocation

Based on EIGEN token allocation data obtained from cryptorank.io, EIGEN has a total token supply of 1.68 billion. 

The token allocation is then divided into several categories, as follows:

- Investors: Received an allocation of 29.5% of total supply, with 29.3% of it still locked.

- Early Contributors: Received an allocation of 25.5%, with 25.3% still locked.

- Community Initiatives: Receives 15% of total allocation, and everything is still locked.

- Ecosystem Development: Also get 15% of the total allocation, all of which is still locked.

- Stakedrop 1: Received an allocation of 6.75%, with 6.71% already unlocked and only a small portion locked.

- Stakedrop 2: Received an allocation of 5.20%, with 5.17% of it already open.

The above allocation data shows that token distribution within the EIGEN ecosystem is designed to support a variety of important roles, such as investors, early contributors, ecosystem development, and community initiatives.

Apart from that, the stakedrop campaign shows that EIGEN wants many people to be actively involved in the EigenLayer project.

Various Advantages of EigenLayer

Apart from discussing EIGEN tokenomics, what is no less important to learn is understanding what the advantages of EigenLayer are.

Here are some of the advantages of EigenLayer that are worth paying attention to:

1. Ethereum Security Extensions

EigenLayer enables reuse of Ethereum security mechanisms through ETH restaking, i.e. Ethereum validators can re-stake their ETH to secure other protocols. 

This capability extends Ethereum's security coverage to various protocols without requiring additional layers of security.

By utilizing a restaking mechanism, the new protocol can achieve the same level of security as Ethereum, minimizing risks and ensuring that objectively attributable errors can be handled efficiently.

2. Intersubjective Error Resolution

EigenLayer is designed to handle intersubjective errors, i.e. errors that cannot be addressed by the ETH restaking mechanism alone. 

This idea is one of the main differences between EigenLayer and traditional restaking systems.

Intersubjective errors are errors that cannot be detected on-chain (in the blockchain) but rational observers agree that they need to be punished.

With the complementary mechanisms of the EIGEN token, these types of errors can be handled, thereby strengthening the security and integrity of the ecosystem.

3. Isolate from Fork Risk

A further advantage of EigenLayer is that it applies a two-token model (EIGEN and bEIGEN) to separate the risks associated with forks from tokens used in DeFi or non-staking applications.

The implementation of the two tokens allows EIGEN holders who use their tokens in DeFi or non-staking applications to remain safe and undisturbed by changes or forks that may occur in the staking token (bEIGEN). 

4. Compensation for Users Affected by Attacks

An advantage of EigenLayer that is no less interesting is that EigenLayer is equipped with a mechanism that ensures that if a protocol (AVS) is attacked due to the error of a malicious EIGEN staker, the AVS can slash the tokens staked by the malicious staker and redistribute them to its users.

Through implementing this protocol, honest users in the system can avoid losses caused by irresponsible parties, ensuring that the system remains safe and fair.

5. Support for Ecosystem Initiatives and Development

EIGEN token allocation supports ecosystem growth through grants, research and development (R&D), as well as operational costs managed by the Eigen Foundation.

Dedicating 15% of tokens to ecosystem development shows EigenLayer's commitment to innovation and sustainable growth, encouraging wider adoption within the blockchain community.

Final Note

This is a review of EIGEN's tekonomics and EigenLayer's superiority.

EigenLayer is a platform that provides stronger security and flexibility for new protocols, while still providing optimal protection for users in a variety of scenarios, especially in the context of intersubjective security and risk management.

The high level of attention to the EigenLayer project and the EIGEN token needs to be supported by sufficient reading sources, so the Bittime blog is the place.

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