Etherfi’s liquid restaking platform recently faced backlash regarding its airdrop distribution after reports emerged that Justin Sun would get a substantial part of the tokens.
On March 16, EtherFi revealed that the first phase of its airdrop will release 6% of the total token supply. ETHFI will have a total supply of 1 billion tokens, with an initial circulating supply of 115.2 million.
Criticism Trails EtherFi Airdrop Distribution
Ether.Fi outlined several criteria to determine eligibility for their airdrop, including holding eETH, referring friends to the protocol, or participating in the Early Adopter Program.
Upon closer examination, community members swiftly discerned that Justin Sun, the founder of the TRON network, stands to obtain roughly 3.5 million ETHFI, equating to 2% of the initial allocation of 60 million tokens.
Community members have speculated that these tokens could be worth as much as $20 million. This allotment would serve as a reward for his recent deposit of 20,000 ETH to the protocol. Some criticized this, pointing out the potential exploitation by whales.
According to the critics, whales could amass significant rewards by farming large amounts, leaving early project contributors with meager rewards.
“The airdrop is divided with 85% allocated to the top 500 wallets, while the remaining 15% goes to over 70,000 wallets (literally where we all fall in sadly)… This points system seems like a game for whales. Probably on-chain tasks or something should help. I’m not sure what happened here or why this even happened, but other restaking platforms should definitely learn from this,” renowned airdrop hunter Abraham Chase wrote.
Read more: Best Upcoming Airdrops in 2024
EtherFi Tokenomics. Source: Ether.Fi
However, supporters of Ether.Fi’s distribution model argue that it incentivizes the desired behavior, such as substantial staking. They contend that protocols are prerogative to incentivize participation as they see fit, with staking being crucial in this scenario. They also note that Sun’s substantial stake likely translated into significant revenue for the protocol.
Nonetheless, the debate persists, with some asserting that flaws exist in all airdrop distribution models. While some prioritize active participation, others favor liquidity. In EtherFi’s case, proponents argue that their model enhances transparency by preventing participants from gaming the system with multiple addresses.
In response to community concerns, Mike Silagadze, the founder of Ether.Fi, reportedly said the project would revise token distribution to serve the community better. The founder also emphasized the importance of adhering to established rules while expressing gratitude for support from major donors like Sun.
Read more: Ethereum Restaking: What Is It And How Does It Work?
Ether.Fi is the largest liquid restaking protocol. According to DeFillama data, the total value of assets on the protocol is approximately $3 billion.
