Hey folks, so the much anticipated release of the $EIGEN token has finally come around, and you may have been debating whether or not to hold or sell. In today’s article, I’m going to be doing a bit of a deep dive into Eigenlayer and $EIGEN’s tokenomics which hopefully will help you make your own decision of what to do (or what not to do).
First of all, Claims
If you’ve been farming different Liquid-Restaked-Tokens (LRTs) like me, you’re most likely eligible for many different $EIGEN claims, including (but not limited to) EtherFi, Swell, or Renzo. With nearly a dozen different LRTs, thankfully benoitded has created an all-in-one-place allocation checker, all accompanied with links directly taken to each platforms eligibility/claims page:
https://checkeigen.byzantine.fi/
(Although I can personally attest to having used the links myself, you can also manually go to each platform’s socials or webpages yourself to find the links yourself.)
A final note on claims, please be wary of gas prices on Ethereum, as there’s been an uptick in transaction fees over the past few days:
$EIGEN Tokenomics
Currently with about 200 million tokens available in circulating supply, the current fully diluted value is sitting at roughly $6 billion dollars:
This is a pretty big evaluation, especially considering that they reportedly they’ve only had raises worth roughly $165 million dollars. However despite its hefty price tag, the token release schedule appears a bit more promising, as the majority of VC unlocks, don’t occur until October 2025:
https://cryptorank.io/price/eigenlayer/vesting
In other words, the current roughly 12% of total $EIGEN that is currently unlocked will have minimal dilution until this time next year.
Token Utility
Before actually doing any research, my initial (wrong) assumption was that the $EIGEN was going to be another vanilla governance token; however upon further inspection, it appears to have much more utility than simple voting power for a DAO.
Intersubjectively Attributable Faults: Probably the stupidest and most confusing term ever created, according to the docs, staking $EIGEN helps ensure the security of the AVSs (Actively Validated Services) running on top. To be clear, the whole point of Eigenlayer is to rehypothecate Ethereum’s decentralized network security for purposes. What $EIGEN does on top is serve as sort of a safety net — the final spot check for any fault that may not be able to be provable by math or cryptography on-chain utilized by the AVS.
In simpler terms, by staking your $EIGEN to an operator, you are helping ensure the security of the AVSs .Currently there are a total of 14 different AVSs that are currently listed on Eigenlayer’s website:
Staking $EIGEN
Once again, staking $EIGEN helps ensure the security of the AVSs, and through social consensus mechanisms such as slashing and forking, operators are incentivized to stay in line with the rules of each AVS. Apart from general smart contract risk, if you choose to stake your $EIGEN, there are a few factors to consider…
Stakedrops: Apart from normal commission rewards one can earn from running an Eigenlayer Operator, staking $EIGEN has the potential of earning the staker stakedrops, much like we’ve seen with other projects such as Dymension ($DYM) and Celestia ($TIA). Therefore if you’re trying to decide which operator to delegate your $EIGEN to, you may want to consider how many different AVSs they have secured:
Personally I chose to delegate some of my $EIGEN to Ether.fi’s operator, as I feel that they have a healthy number of AVSs secured (5), as well as community trust with more than 9k different stakers.
Liquid Restaking: Speaking of operators, one particular operator, Luganodes, in partnership with Renzo protocol now offers a Liquid-Restaking solution for $EIGEN in the form of $ezEIGEN:
Being able to liquid restake your $EIGEN is particularly useful because it helps holders utilize their $EIGEN in DeFi, while at the same time earning a 6–8% APR and avoiding Eigenlayer’s 7-day escrow period which you would have to wait if you were staking your $EIGEN directly.
Conclusion
Given the fact that $EIGEN and Eigenlayer are really going into some uncharted territory, I’ve personally decided to stake the majority of my $EIGEN because in my opinion, Eigenlayer’s true potential remains yet to be seen. However due to some massive unlocks coming next year, my hopeful plan is that over the course of the next several months, to systematically unstake and sell-off a good portion of my $EIGEN once/if valuations overall for crypto seem super frothy.
Are there any considerations I missed? And what are you doing with your $EIGEN? Hit me up in the comments below to leave your two cents.
And as always thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!
Disclaimer: This is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!