EIGEN Token Performance is Considered Slow After Listing, What’s the Cause?
2024-10-15
Bittime - After official listing on October 1, 2024, the EIGEN token price of the re-staking protocol EigenLayer shows slow performance.
EIGEN's price continues to fluctuate between $3 to $4, a far cry from the $13 it was trading at on the OTC market earlier this year. Why? Read this article to find out more!
EIGEN Token Utility Uncertainty
One of the causes of EIGEN's poor performance in the market is the lack of clarity regarding the utility or use of this token.
In white paper released in April 2024, EIGEN is described as a “Universal Intersubjective Work Token”, a complex concept that is difficult for most investors to understand.
The explanation of EIGEN's main functions, although technical and advanced, appears to be too complex for most of the market.
Read Also: Mantle Distributes EIGEN Airdrop to USDe Holders in Pendle
Uses of EIGEN Token
The function of the EIGEN token is claimed to include three main aspects, namely versatility cross-chain, network task execution function, And the ability to resolve subjective failures.
EIGEN tokens can be used on various blockchain infrastructures and support Available Validator Set (AVS) operations. EIGEN also helps resolve technical issues that are difficult to verify through a consensus mechanism.
While the functionality may seem sophisticated, the fact that this explanation is difficult for the average investor to understand has an impact on the market's perception of the price of the EIGEN token.
Many investors may feel confused about how these tokens can actually be applied thereby reducing interest in them.
Selling Pressure from EIGEN Token Airdrop
In addition to the lack of clarity regarding the token's utility, selling pressure from airdrop also played a big role in the decline in the price of the EIGEN token. As much as 46% of the total 185 million EIGEN tokens circulating on the market, or around 86 million tokens, have been distributed via airdrop.
This massive distribution created significant selling pressure as many airdrop recipients chose to sell their tokens on the market, which is a live influence on EIGEN token price.
In addition, several reports reveal that important figures in the crypto industry such as Justin Sun And GCR transferred a large amount of EIGEN tokens they received via airdrop to a central exchange.
Read Also: Eigen Reward Claim Postponed until October 15 2024!
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