Ethereum Researchers Resign from EigenLayer Advisory Roles Amid Controversy

Highlights:

• Justin Drake and Dankrad Feist resigned from their advisory roles at Eigen Foundation.
• Drake said taking the advisory role at EigenLayer was a “bad move.”
• EigenLayer recently airdropped 86 million tokens but faced major security issues.

Two high-profile Ethereum Foundation researchers, Justin Drake and Dankrad Feist, have stepped down from their advisory roles at Eigen Foundation, the entity responsible for overseeing the development of the Eigenlayer restaking protocol. The researchers announced on social media on November 2 that they had resigned from their advisory positions to focus on the Ethereum network. 

Drake stepped down in September but publicly announced his exit yesterday. He admitted that taking the advisory role was a “bad move.” Feist added that while EigenLayer is still valuable, his focus needs to be fully on Ethereum.

TLDR: I dropped the EigenLayer advisorship, left the ultra sound team, and made other changes to double down on neutrality and focus on L1 research and coordination.

In September I let go of the EigenFoundation advisorship. I want to apologise to the Ethereum community and EF…

— Justin Ðrake 🦇🔊 (@drakefjustin) November 2, 2024

Conflict of Interest Controversy Surrounding EigenLayer Advisory Roles

The trouble began in May this year. It was revealed that both Ethereum researchers were advising EigenLayer. According to DefiLlama, EigenLayer ranks among the top three DeFi projects on Ethereum by Total Value Locked (TVL).

On May 19, Justin Drake announced he accepted a paid advisory role at the Eigen Foundation. This sparked controversy and backlash from the Ethereum community. Drake claims he received millions of dollars in EIGEN tokens for his advisory work. He stated that the token value was “more than the combined value of all my other assets.” His role would focus on researching technical, protocol, and structural risks related to restaking. Drake also clarified that he would not be involved in marketing EigenLayer to the public.

At that time, Ethereum Foundation executive director Aya Miyaguchi responded to the concerns by promising to establish a formal conflict-of-interest policy.

Miyaguchi posted on X in May:

 “It is clear that relying on culture and individual judgment has not been sufficient, and we have been working on a formal policy to address this problem for a while now. We will be accelerating this work, and will share an update soon.” 

Although the update has not yet appeared, Drake’s post hinted at a policy in effect.

In his public apology to the Ethereum community, he stated:

“Going forward, I will turn down all advisorships, angel investments, and security councils. This personal policy goes above and beyond the recent Ethereum Foundation-wide conflict of interest policy, not because that was asked of me, but because I want to signal a commitment to neutrality.”

EigenLayer’s Token Airdrop and Security Challenges

EigenLayer is making headlines with its Season 2 “stakedrop” campaign. The campaign features airdropping 86 million EIGEN tokens, about 5.1% of its total supply. The airdrop has three main allocations. It includes 70 million tokens for stakers and operators, 10 million tokens for ecosystem partners like liquid staking networks, and 6 million tokens for early advocates and contributors.

EigenLayer took the airdrop snapshot on August 15, and claims opened on September 17. However, the platform has faced several security issues. In October, there was an unauthorized sale of 1.67 million EIGEN tokens, worth about $3.3 each.

This sale raised concerns about potential violations of EigenLayer’s lockup policy. The policy prohibits current and former employees from selling or staking tokens before September 2025. The wallet used for the sale was connected to EigenLayer’s Gnosis Safe, adding to the confusion about internal controls. On October 18, a security breach resulted in the theft of around $5.7 million.

Community Update

We are investigating unapproved selling activity associated with this wallet: (https://t.co/Pp9KoTfACp).

We will share our findings with the community as soon as possible.

— EigenLayer (@eigenlayer) October 4, 2024

An attacker used address spoofing to imitate an investor and bypass security measures to steal funds. In response, EigenLayer has been reviewing its security protocols. The platform aims to tighten these measures to prevent future breaches.