Project Overview
The goal of EigenLayer is to let users restake their ETH or Liquid Staking Tokens (LSTs) and use that restaked capital to secure other decentralized applications or services, called Actively Validated Services (AVSs). These can include rollups, oracles, bridges, and more.
It addresses the issue of fragmented security in DeFi. Normally, every new decentralized project has to build its own validator system or security framework. EigenLayer solves this by letting projects “borrow” Ethereum’s validator security through restaking, which lowers entry barriers and helps the ecosystem grow in a more unified way.
Moreover, it is a solution to diminish financial obstacles. By continuously reevaluating the rewards and assets staked, restaking protocols like EigenLayer also allow participants to optimize their capital use, earning higher yields without increasing their initial investment.
Utility and Value Proposition
The EIGEN token is used primarily for governance and staking within the EigenLayer protocol. Token holders can use it to participate in decisions that shape the platform’s future, and they can stake it to secure specific Actively Validated Services (AVSs), contributing to the security and reliability of those services.
Restakers can select which services they want to support, and in return they gain access to extra rewards and potentially early participation in new protocols. This is how the token generates value for its holders. Restakers receive rewards from the AVSs they choose to support. This is on top of the staking rewards they already get from staking ETH, making restaking a way to increase yield. Some AVSs may offer their own tokens as rewards as well.
Long term restaking is encouraged as restakers may benefit from ongoing AVS rewards, future airdrops, and potentially more governance influence when EigenLayer becomes decentralized.
Governance and Community
The EIGEN token is designed to be a governance token, enabling holders to vote on proposals that impact the protocol. This includes decisions about AVS inclusion, protocol upgrades, and security parameters. Voting power is expected to be proportional to the amount of EIGEN held or staked.
Currently, the governance process is still controlled by the EigenLayer core team and a group of multisig signers. However, the team has announced plans for gradual decentralization through a system called EigenGov, which will shift governance rights to the community over time.
The community is highly engaged. There is growing interest from Ethereum stakers, LST holders, and AVS developers. Conversations are active on Twitter/X, Discord, and various crypto forums.
Liquidity and Market Performance
The EIGEN token is listed on several major centralized exchanges (CEXs), including Binance, HTX, Gate.io, Bybit, and KuCoin. For instance, on Binance, the EIGEN/USDT trading pair has a 24-hour trading volume of approximately $10.49 million. While EIGEN is available on these CEXs, there is limited information about its presence on decentralized exchanges (DEXs).
EIGEN has experienced significant trading activity, with a 24-hour trading volume of around $44.34 million. The token’s price has seen fluctuations; for example, it reached an all-time high of $5.65 on December 17, 2024, and is currently trading at approximately $0.72, marking an 87.2% decline from its peak.
EIGEN has a market capitalization of approximately $169.4 million, with a circulating supply of about 234.98 million tokens.
Regulatory and Compliance
The Eigen Foundation has taken steps to remain compliant by excluding certain jurisdictions, such as the United States, from claiming EIGEN tokens. The protocol itself is non-custodial and does not require KYC to interact with it.
Technology and Smart Contracts
EigenLayer is entirely built on Ethereum.
Ethereum is highly secure and decentralized, making it a strong base layer. However, it has relatively high fees. EigenLayer can support scalable solutions like rollups, which are more efficient and lower cost.