As a seasoned researcher with years of experience in the dynamic world of cryptocurrencies, I’ve seen my fair share of market fluctuations and token launches. The recent dip in EigenLayer (EIGEN) after its highly anticipated airdrop didn’t come as a complete surprise to me. It’s a familiar pattern we often see – excitement at launch, followed by a period of adjustment.
As a researcher, I observed a significant retreat of approximately 2% in Eigenlayer tokens following the highly anticipated airdrop this year.
EIGEN slips after its airdrop
EigenLayer’s price dropped to $3.61, resulting in a market value of approximately $717 million. The platform has a total of 1.68 million tokens, with around 186 million currently in circulation.
The fully-diluted worth, determined by multiplying the total amount in circulation with the cost, surpassed $6.4 billion.
In a Polymarket poll with significant investments (over $5.4 million), most participants correctly anticipated that the Final Determination Value (FDV) would be less than $10 billion. About 96% of them predicted an FDV below this figure, while only 2% believed it would fall between $10 billion and $15 billion.
There are three likely reasons why the EIGEN token retreated. First, only a small amount of the tokens were released during its airdrop, meaning that holders can expect more dilution in the future as the rest are brought to the market.
Next, the pullback occurred because the overall condition of the crypto market was unfavorable, with many coins showing losses. Bitcoin (BTC) dipped by 1.3% to $62,700, while the total market capitalization of all cryptocurrencies decreased by 1.13% to over $2.23 trillion. In general, new tokens tend to decline when the broader market is experiencing a downturn.
Newly launched tokens often drop
Ultimately, it appears that EigenLayer’s token may have decreased in value due to many recipients of the airdrop selling off some or all of their holdings. This is often seen with airdrops. For instance, Hamster Kombat’s popular tap-to-earn token has fallen by more than 50% since its airdrop last week.
This year, many highly favored tokens experienced a significant decline following their airdrops. For instance, Wormhole (W) has plummeted by 82% from its peak. Likewise, ZkSync, Notcoin (NOT), and Catizen (CATI) have all seen a drop in value post-launch.
EigenLayer ranks among the top three rapidly expanding entities within the decentralized finance sector, boasting more than $11.75 billion in assets and receiving $150 million in venture capital investments. Following closely behind Lido DAO and AAVE, it holds a significant position in this dynamic industry.
The network introduced the concept of restaking, where users re-stake their previously staked assets back to a staking pool. By doing so, users earn two compounding returns over time.
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2024-10-01 18:53