Original title: "EIGEN unlocking soon? A brief analysis of EigenLayer's current valuation and profit expectations"

Original author: Azuma, Odaily Planet Daily

In the past two days, EigenLayer, the pioneer of the restaking track, has announced two major actions regarding EIGEN tokens.

· First, the second season (Season 2) airdrop is now open for claiming, and the claim window will last until March 16, 2025.

· Second, the programmatic incentives (Programmatic Incentives V1) will be launched. Starting from October (historical behavior can be traced back to August 15), EIGEN incentives will be issued to qualified stakers and operating nodes on a weekly basis. In the first year, it is expected that about 66.95 million EIGEN will be distributed, equivalent to 4% of the initial supply of EIGEN.

In the view of some users who pay attention to EigenLayer, the sudden acceleration of EigenLayer is to warm up for the upcoming "EIGEN unlocking" event, in order to win more market attention and participation after EIGEN is officially circulated.

On May 10 this year, EigenLayer opened the first season (Season 1) airdrop application, but since the application, the EIGEN token has been in a non-transferable state. This more or less "appetite-keeping" behavior has also prevented EigenLayer from gaining the discussion that matches its status in the secondary market.

When will EIGEN be unlocked?

Regarding the unlocking time of EIGEN, the first thing that needs to be adjusted is that there has been a long-standing misunderstanding in the market that the circulation unlocking time is September 30.

The reason for this misunderstanding is that the Eigen Foundation mentioned the date of September 30 in the official document on the unlocking timeline in May, but if you look closely at the description of the Eigen Foundation, you will find that the description is actually: "Earlier this week, we announced that ElGEN will be unlocked after new features are live and further decentralization is achieved, but we did not announce a specific date. In order to clarify the time plan, we plan to implement these features on the mainnet before September 30, 2024."

From the statement of the Eigen Foundation, it can be seen that the unlocking of EIGEN's transfer function should be after the realization of "launching new functions and further decentralization", and September 30 is the time expectation set by EigenLayer for "launching new functions and further decentralization".

Regarding the progress of "launching new functions and further decentralization", "launching new functions" is a relatively subjective concept. After May, EigenLayer has successively launched functions such as "AVS rewards" and "programmed incentives", but it is difficult for the outside to judge EigenLayer's own assessment of progress; as for the progress of "further decentralization", it is relatively captureable. EigenLayer's first quarter airdrop has ended, and the final claim rate is about 78.6%. The second quarter airdrop and subsequent incentive plans will further accelerate the distribution of EIGEN tokens.

In summary, EigenLayer officials did not mention that the transfer function of EIGEN will be unlocked on September 30, but combined with the progress of the condition of "further decentralization", I personally predict that after the second quarter airdrop and incentive plan are opened, the final unlocking time of EIGEN will not be delayed too long.

EigenLayer basic data and valuation expectations

DeFillama data shows that EigenLayer's current TVL total value is temporarily reported at US$10.79 billion, ranking third among all ecological protocols, second only to the liquidity pledge giant Lido and the lending leader Aave.

EigenLayer official data shows that the protocol currently supports 16 AVS (active verification services) including EigenDA, and the service scope covers DA, oracle, privacy, DePin, games, ZK verification and other fields. Although Symbiotic, Karak, Solayer, Jito and other major re-staking protocols from different ecosystems are coming in full force, at present, EigenLayer is still the protocol with the largest value scale, the fastest development progress and the strongest network effect in the entire re-staking track.

The reason why we emphasize "network effect" is that in addition to its own strong fundamentals, EigenLayer has almost single-handedly driven half of the innovation of the Ethereum ecosystem. Around different fields such as liquidity re-staking and concrete AVS services, a large number of projects including ether.fi, Renzo, Puffer, Eigenpie, AltLayer, Omni, eoracle, etc. have found the role scenarios of their own protocols and rely on EigenLayer for development.

This is why the community once joked that EigenLayer was the "guardian" of Ethereum, the "Emperor of Zhou"...

In terms of valuation, although EIGEN has not yet activated the transfer function, some pre-market trading markets including Aevo have launched EIGEN contract transactions. As of the time of posting, EIGEN is temporarily quoted at $2.95 on Aevo.

Since the total supply of EIGEN at the time of creation was 1.67 billion pieces, the $2.95 quote means that the FDV corresponding to EigenLayer is approximately $4.9265 billion.

As for the initial circulation market value, EigenLayer has not yet disclosed the initial circulation structure of EIGEN, but we can combine the data of the two airdrops to make a simple calculation of the user's holdings (not considering the incentive plan for the time being, because the weekly distribution will only start in October, and the early circulation accounts for a small proportion). In the first quarter of EigenLayer's airdrop, a total of about 87.89 million EIGEN were claimed (the claim rate was about 78.6%); in the second quarter, a total of 86 million EIGEN will be distributed (60 million to pledgers and operating nodes, 10 million to ecological partners, and 6 million to community contributors). If the claim rate is the same as in the first quarter, the final claim amount is expected to be 67.59 million, and a total of 155 million EIGEN will be claimed in the two quarters.

This means that the total value of EIGEN obtained by all users through the two seasons of airdrops is approximately US$457 million - this is also the EIGEN share that can be determined to be in full circulation.

Will there be more airdrops in the future?

When announcing the first season of airdrops earlier this year, EigenLayer mentioned that 15% of EIGEN tokens would be distributed in the form of airdrops, and the official first and second seasons of the airdrops are planned to distribute 113 million and 86 million EIGEN respectively, totaling about 200 million EIGEN, accounting for about 11.9% of the total supply of 1.67 billion genesis.

This means that within EigenLayer's plan, about 3.1% of EIGEN tokens will still be used for future airdrop rounds.

Based on my personal experience, considering that the second round of airdrops did not adopt the "even distribution" plan of 100 minimum airdrops in the first round of airdrops, the airdrop shares available to small and scattered staking users are relatively small (after all, the base is too large), and the airdrops with larger single shares are basically allocated to whale users, operating nodes and community contributors - especially KOLs who have created high-quality content related to EigenLayer on social media, generally received thousands or even tens of thousands of EIGEN airdrops.

Therefore, in the subsequent potential airdrop rounds, small and scattered users who continue to stake on EigenLayer for the purpose of airdrops may no longer have ideal income expectations, unless they find another way to choose a participation method with a higher threshold such as original output.

The incentive plan has been launched, what are the income expectations?

In addition to airdrops, another way to earn EIGEN directly is the incentive program that will be launched in October. The program aims to issue EIGEN incentives to qualified stakers and operating nodes on a weekly basis.

EigenLayer officials said that the incentive will be retroactively rewarded based on the staking situation since August 15, 2024, and the first round of rewards will be available every week starting in October. In the first year of the program, it is expected that approximately 6,695 EIGEN will be distributed, equivalent to 4% of the initial supply of EIGEN tokens .

Combining the above data, we can simply calculate the potential yield of stakers under this incentive program.

First of all, the distribution targets of the incentive plan are two major groups, namely stakers and operating nodes, but EigenLayer has not clearly stated the proportion allocated to the two groups. Therefore, we chose to refer to the distribution ratio of EigenLayer to stakers and operating nodes when designing the second season airdrop. As shown in the figure below, EigenLayer distributed 3.68% of the supply of EIGEN to stakers and 0.52% of EIGEN to operating nodes in the second season airdrop, with the distribution ratio of the two major groups being roughly 88:12.

Based on this ratio, of the total incentive share of 6,695 EIGEN in the first year, it is expected that 58.91 million EIGEN will be distributed to stakers, which is about $174 million at a price of $2.95. As mentioned above, EigenLayer's current TVL is temporarily reported at $10.79 billion, which means that the potential return of staking users under this incentive plan is expected to be 1.6%.

It should be emphasized that the above calculation is a rough calculation based on subjective allocation predictions and static currency prices, and the final yield situation still needs to be based on the actual progress of EigenLayer. Although the 1.6% yield does not seem objective, EigenLayer pledge users are mainly composed of large capital users with a left-leaning "security/yield" tendency, and they will pay more attention to the security level and liquidity of the protocol itself. On this basis, considering that EigenLayer itself can also provide about 3% of native staking income, coupled with the expected appreciation of EIGEN, staking on EigenLayer still has a certain financial appeal.

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