EigenLayer Token Unlock Hits Snag: Price Dips and Security Concerns
coinedition.com 08 October 2024 10:54, UTC EigenLayer’s token unlock, which happened last week, has led to disputes and price fluctuations, worrying investors. The token’s price has been falling since the unlock, raising questions about what may have gone wrong.
After its initial launch, EIGEN’s price opened at $4 but quickly fell by 20%, trading around $3.30 by the end of the week. The token price decline slowed down between Thursday and Friday, but concerns over the protocol’s airdrop process grew.
Concerns emerged following Friday’s questionable transfer of $5.5 million worth of EIGEN tokens, which some believed broke the token lockup schedule.
EigenLayer clarified that the incident was a security breach. A compromised email account associated with an investor allowed the transfer of over 1.6mn EIGEN tokens to an unauthorized party.
The EigenLayer team said this was an isolated incident, but market uncertainty remained. As a result, the mishandled transfer has hurt investor sentiment and contributed to further price declines, overshadowing the token unlock.
Market Sentiment and Token Resilience
While the market’s response to the token unlock hasn’t been good, several indicators suggest that the project has long-term potential. Despite the falling price, the number of active operators on the EigenLayer network has grown throughout the year, reaching 146.
Read also: EigenLayer’s $15B Token Launch Sparks Division for Excluding US, China
Is Mindshare Always a True Reflection of a Project’s Sentiment?$EIGEN might be experiencing low sentiment at the moment, but there are some promising indicators beneath the surface.
Despite market sentiment, the project has consistently onboarded new operators throughout the… https://t.co/d7vFB0cw51 pic.twitter.com/c4Rhtk787P
— Mars_DeFi (@Mars_DeFi) October 7, 2024
Investors are also watching the next cliff unlock scheduled for next week. With 359 days remaining until the full unlock event, EigenLayer has plenty of time to recover from these setbacks.
As of press time, the EIGEN token is trading at $3.49, showing some stabilization after a period of volatility. Earlier in the day, the price moved between $3.40 and $3.35 during the morning hours, following a gradual decline from the previous day’s peak of around $3.60.
Despite notable dips on October 7, when the token dropped below $3.50 after reaching its high, the price showed signs of recovery by mid-morning.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
