🌎 EigenLayer Token Falls Over 2% Post-Airdrop Amid Market Downturn

EigenLayer Token Drops Over 2% Following Anticipated Airdrop

Price Movement of EigenLayer Token

The EigenLayer token experienced a decline of over 2%, falling to $3.61. This dip brought its market capitalization to $717 million, with a total supply of 1.68 million tokens and 186 million currently in circulation. The fully diluted valuation (FDV) of EigenLayer stands at over $6.4 billion, which aligns with predictions from a recent poll where 96% of participants expected an FDV of less than $10 billion.

Factors Behind the Token’s Decline

Several factors contributed to the retreat of the EIGEN token:

Limited Token Release

Initially, only a small portion of the tokens was released during the airdrop. This limited release suggests potential future dilution as more tokens enter the market, impacting the token’s value.

Market Conditions

The broader cryptocurrency market was also experiencing a downturn. For instance, Bitcoin fell by 1.3% to $62,700, and the total market capitalization of all cryptocurrencies decreased by 1.13% to $2.23 trillion. Newly launched tokens often see a decline in such market conditions.

Airdrop Recipient Behavior

Many recipients of the airdrop likely sold off some or all of their positions, a common trend observed with airdrops. For example, the Hamster Kombat token dropped over 50% following its recent airdrop.

Comparative Analysis with Other Tokens

Other tokens have also seen significant declines post-airdrop. For instance, Wormhole (W) has fallen by 82% from its all-time high. Similarly, tokens like ZkSync, Notcoin (NOT), and Catizen (CATI) have all experienced sharp drops after their launches.

EigenLayer’s Position in Decentralized Finance

Despite the recent price drop, EigenLayer remains a significant player in the decentralized finance (DeFi) industry. With over $11.75 billion in assets and $150 million in venture investment, it is ranked alongside prominent names like Lido DAO and AAVE.

Innovative Restaking Concept

EigenLayer has introduced the concept of restaking, allowing users to re-stake their previously staked assets into a staking pool. This mechanism enables users to earn compounded returns over time, offering a unique value proposition in the DeFi space.