Eigenlayer token retreated by over 2% after launching one of the most anticipated airdrops of the year.
EIGEN slips after its airdrop
EigenLayer (EIGEN) retreated to a low of $3.61, giving it a market cap of $717 million. It had a total supply of 1.68 million tokens, with 186 million in circulation.
Its fully diluted value, which is calculated by multiplying the total supply by the price, was over $6.4 billion.
The FDV valuation means that most participants in a Polymarket poll with over $5.4 million in assets, were correct. 96% predicted that it would have an FDV of less than $10 billion, while 2% estimated that the valuation would be 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.
Second, the retreat happened due to the general state of the crypto market, where most coins were in the red. Bitcoin (BTC) retreated by 1.3% to $62,700, while the total market cap of all cryptocurrencies fell by 1.13% to over $2.23 trillion. In most periods, newly launched tokens often drop when the broader market is not doing well.
Newly launched tokens often drop
Finally, EigenLayer’s token likely retreated as many of the airdrop recipients exited some or all of their positions. This is a common occurrence with airdrops. For example, Hamster Kombat, the popular tap-to-earn token, has dropped by over 50% after its airdrop last week.
Other popular tokens dropped sharply after launching their airdrops this year. Wormhole (W) has fallen by 82% from its all-time high. Similarly, ZkSync, Notcoin (NOT), and Catizen (CATI) have all fallen after their debut.
EigenLayer is one of the fastest-growing players in the decentralized finance industry, with over $11.75 billion in assets and $150 million in venture investment. It is only the third one after Lido DAO and AAVE.
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.
