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Conflict of Interest Concerns Over Ethereum Researcher's Paid Role at EigenLayer

Key Takeaways

  • Justin Drake, a researcher at the Ethereum Foundation has become a paid advisor for EigenFoundation;
  • In this role, Drake will focus on researching restaking risks;
  • The community's reaction is mixed, with some praising Drake's transparency and others worried about conflicting incentives.
Conflict of Interest Concerns Over Ethereum Researcher's Paid Role at EigenLayer

On May 19, Ethereum Foundation researcher Justin Drake revealed his new position as a paid advisor for EigenLayer's foundation, EigenFoundation.

In the announcement, Drake mentioned that this role comes with a substantial EIGEN token package worth millions of dollars, which exceeds the value of all his other assets combined.

This has sparked debates within the crypto community over potential conflicts of interest.

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Launched on the Ethereum mainnet in April, EigenLayer enables users to stake liquid staked Ether (ETH) tokens, allowing ETH to be staked twice.

Drake's advisory role focuses on researching the risks associated with restaking. He emphasized aiming to steer EigenLayer from within and avoid past mistakes with liquid staking:

As a researcher I feel I did too little too late with regard to liquid staking. This is an opportunity to not repeat the mistake with restaking. 

The announcement has sparked mixed reactions within the community.

Crypto X influencer Jordan Fish, also known as Cobie, expressed concerns about Drake's new role, directly addressing Ethereum's co-founder Vitalik Buterin with a question:

How do you feel about Ethereum foundation core developers or researchers taking life-changing $ packages from projects built on Ethereum to become "advisors," when those projects may have conflicting incentives with Ethereum, either now or in the future? For example — purely theoretically of course — let's say, EigenLayer.

Drake addressed the controversy by asserting that EigenLayer is not attempting to "bribe" or "corrupt" the Ethereum Foundation.

He noted that the Ethereum Foundation comprises over 300 members, with only three individuals having formal relationships with EigenLayer entities. Drake reassured that the involvement of a few members would not compromise their ethics and that he is prepared to end his advisory role if EigenLayer's direction conflicts with Ethereum's interests.

Following the post, some figures in the crypto community, including David Wong, founder of security firm zkSecurity, praised Drake for his transparency. 

Overall, Drake's acceptance of the role at EigenFoundation highlights the importance of transparency and ethical responsibilities among Ethereum Foundation members.

In other news, EigenLayer was involved in more controversies earlier in May when the protocol had to increase its EIGEN token airdrop due to community backlash.

Aaron S., Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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