Ethereum researchers Justin Drake and Dankrad Feist have left their advisory positions at the restaking platform Eigenlayer.
The announcement was made on November 2 on microblogging platform X. According to both researchers, their undivided focus will now be entirely on the Ethereum base layer. Drake quit the position in September but made the development public yesterday.
In his statement, he tendered a heartfelt apology to the Ethereum Foundation and the Ethereum community for the issues that he caused. He noted that deciding to take up the advisory role at Eigenlayer was a bad move. Meanwhile, Feist clarified that Ethereum needs his undivided attention, despite still seeing Eigenlayer as a valuable project.
Issues arise over conflict of interest and compensation
The origin of the issue dates back to May when reports revealed that both researchers were part of the advisers of Eigenlayer. During the period, the platform was one of the top projects on Ethereum in terms of Total Value Locked (TVL), according to data from DefiLlama.
The platform‘s success became a source of concern due to the activities of its core contributors. The main reason was the hefty compensation packages they earned in their roles. According to Drake’s contract, he was owed millions of dollars in tokens vested over three years.
In response to the development, Ethereum Foundation executive director Aya Miyaguchi said the firm will implement a policy to uphold conflict of interest. In her statement on X, she stated that relying on culture and individual judgment has not been enough and the company has been working on a new policy for a while.
Miyaguchi mentioned that the policy would be speedily approved to prevent a reoccurrence. While the policy is yet to be implemented, Drake said he left the role due to his change in approach. He said he is committed to avoiding advisory, investment, and participation in security councils in the future.
Eigenlayer launches token airdrop amid its security issues
Eigenlayer has been making waves in the industry for reasons other than its advisory members. The platform launched season 2 of its stakedrop. It will share 86 million EIGEN, about 5.1% of its total supply, in the airdrop.
The airdrop is in three allocations, with Stakers and Operators, Ecosystem Partners, and Community Members getting a piece of the pie. The airdrop’s snapshot has already been taken, with eligible members waiting for claims to open on September 17.
However, the platform has continued to endure issues related to security, with an unauthorized sale of 1.67 million EIGEN, worth $3.3 per token made. The sale raised red flags, calling into question the company’s policy prohibiting former or current employees from selling or staking tokens before September next year.
The wallet involved in the sale was traced to the company’s Gnosis safe, adding to the confusion around internal controls. The sale made the company examine its security system and address weak links in its compliance protocols.
On October 18, the platform suffered a security breach, leading to the theft of $5.7 million. The attacker used address spoofing to mimic an investor and was able to breach security and steal funds. In response to the attack, Eigenlayer has been beefing up its security with hopes of similar or other types of breaches in the future.
The token unlocked on October 1, instantly entering the top 100 tokens by market cap. The token’s diluted valuation rose to $7.2 billion, while its price rose to $3.59. However, the unauthorized sales and security issues have made the market volatile. Several price swings and uncertainty have dominated its trading due to its internal crisis.