Ethereum Dev’s EigenLayer Role Raises Conflict of Interest Concerns

A recent move by an Ethereum Foundation researcher has ignited a debate on social media. The researcher, Justin Drake, decided to join the advisory board of EigenFoundation, receiving a significant incentive in the form of EIGEN tokens. This decision has led to concerns about potential conflicts of interest. One comment on the matter suggested that such arrangements could create “conflicted incentives.”

In a detailed post on May 19, Justin Drake revealed that his advisory role at EigenFoundation came with a generous incentive package. The package includes EIGEN tokens, which are vested over three years and valued at millions of dollars. Drake mentioned that this amount is more than the combined value of all his other assets. EigenLayer, a protocol partially launched on the Ethereum mainnet in the previous month, allows users to stake liquid staked Ether (ETH) tokens, making it possible to stake ETH twice.

Drake clarified that he accepted the advisory position with a specific focus on researching restaking risks. He assured that his primary stance would remain critical of EigenLayer, recognizing that this role carries risks beyond just his reputation. “By being an adviser, I hope to have a front-row seat to restaking issues and steer EigenLayer from within,” he stated. Drake expressed a sense of missed opportunity with liquid staking and saw this role as a chance to engage more proactively with restaking.

Just a day prior, Jordan Fish, also known as Cobie, asked Ethereum co-founder Vitalik Buterin for his views on Ethereum Foundation members accepting substantial monetary packages from other projects. Fish raised a hypothetical scenario involving EigenLayer and suggested these packages might conflict with the interests of Ethereum. This query highlighted a growing concern within the cryptocurrency community about the potential for conflicting incentives.

On the contrary, some industry figures have shown support for Drake’s transparency. Notable mentions include Hudson Jameson, vice president of governance at Polygon, David Wong, co-founder of zkSecurity, and Robbie Nakarmi, director of crypto investments at Standard Chartered ventures. These individuals commended Drake for openly disclosing his new advisory role and its associated incentives.

In his detailed post, Drake sought to dispel the notion that EigenLayer is attempting to “bribe” or “corrupt” the Ethereum Foundation. He pointed out that the Ethereum Foundation is a large organization with over 300 employees. According to Drake, only three members have formal relationships with EigenLayer-related entities: one as an early investor in EigenLabs and two as recent advisors to EigenFoundation.

Drake emphasized that the involvement of these few individuals does not compromise the organization’s integrity. He asserted his readiness to end his advisory position should EigenLayer take a direction that conflicts with Ethereum’s core interests. This assurance was meant to address concerns about potential ethical breaches within the foundation.

EigenLayer itself has faced scrutiny from its user base. Earlier in May, the project airdropped 28 million more EIGEN tokens to its users following criticism that its initial program was too restrictive. This move indicates that EigenLayer is responsive to community feedback and willing to make adjustments to meet user expectations.

While Justin Drake’s new advisory role with EigenFoundation has raised eyebrows, his efforts to remain transparent and committed to Ethereum’s foundational principles have garnered support from some quarters. The ongoing debate highlights broader issues about the relationships between major blockchain projects and the individuals who research and develop within them.