Ethereum dev’s paid EigenLayer role sparks debate on ‘conflicted incentives’

As a crypto investor with experience in the Ethereum ecosystem, I’m closely following the recent developments surrounding Ethereum Foundation researcher Justin Drake and his new role as an adviser for EigenFoundation. The potential conflict of interest raised by this decision has sparked intense debate within the community.

A researcher at the Ethereum Foundation has drawn criticism on social media after accepting a compensated advisory position with EigenLayer’s founding team. Some observers have raised concerns that this arrangement might lead to potential conflicts of interest.

In a lengthy post on May 19th, Ethereum researcher Justin Drake revealed his new advisory role at EigenFoundation. This position comes with a substantial incentive in the form of EIGEN tokens, worth millions of dollars over a three-year period, which exceeds the value of all his other assets combined.

As a researcher, I’d describe it this way: Last month, the EigenLayer protocol partially went live on the mainnet. With this innovation, users can now stake liquid staked Ethereum (ETH) tokens – derivatives of ETH that represent staked ETH in protocols like Lido. Essentially, this means Ethereum can be staked multiple times through this method.

Drake agreed to accept the position under the stipulation that his responsibilities were focused solely on assessing potential risks related to restaking. He emphasized that his stance would remain skeptical towards EigenLayer, while recognizing that the job inevitably entailed risks beyond just damaging his personal reputation.

“As a consultant, I aim to closely observe and influence decision-making processes at EigenLayer, preventing past errors in implementing staking strategies, specifically in relation to ‘restaking’.” – Drake’s perspective.

The day prior, crypto trader and UpOnly co-host Jordan Fish, known as Cobie, posed a question to Ethereum co-founder Vitalik Buterin. He inquired about the Ethereum Foundation staff accepting significant financial packages from projects that could potentially have conflicting interests with Ethereum. EigenLayer was provided as a hypothetical scenario.

Ethereum dev’s paid EigenLayer role sparks debate on ‘conflicted incentives’

In contrast, Hudson Jameson of Polygon, co-founder David Wong at zkSecurity, and Robbie Nakarmi from Standard Chartered’s crypto investments commended Drake for his transparency.

In a recent post on X, Drake attempted to refute allegations that EigenLayer was making attempts to bribe or corrupt the Ethereum Foundation.

As an analyst, I’d put it this way: “The Employees’ Fund (EF) is a substantial team of over 300 individuals. Among them, I’ve identified three individuals who hold formal connections with EigenLayer: one served as an early investor in EigenLabs, and the other two currently advise the EigenFoundation.”

He stated that he didn’t anticipate the 1% of Ethereum Foundation (EF) members associated with EigenLayer would compromise their ethics. Furthermore, he was prepared to terminate his advisory role if EigenLayer’s actions went against Ethereum’s best interests.

In the first half of May, EigenLayer distributed an additional 28 million units of its EIGEN token through an airdrop, following criticism from some users who felt the distribution program was excessively limiting.

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2024-05-20 10:06