EigenLayer’s native token, EIGEN, experienced a sharp price drop of 20% shortly after being listed on Binance and other top exchanges. Despite initial excitement surrounding the listing, concerns over transparency quickly shifted market sentiment.
These issues appear to have harmed the token’s potential growth, causing uncertainty among new and existing investors.
Eigen Labs Under Fire
EigenLayer made headlines ahead of the listing of its native token, EIGEN. However, following the listing, the token made headlines again, but for a different reason. The network’s developers, Eigen Labs, were criticized for their lack of transparency regarding the staking of the token.
Generally tokens issued to the investors of the project are locked up as to prevent a pump and dump. These tokens are then gradually unlocked over time known as the “vesting period” only after which are investors allowed to trade or sell them.
Read More: What Is EigenLayer?
Interestingly this is not the case with EIGEN as investors were already allowed to stake their “locked up” tokens. While this was not initially communicated by Eigen Labs, it was simply added to their update documents.
This led to a massive uproar in the community, in response to which Eigen Labs provided clarity on Wednesday.
“Investors are allowed to stake both EIGEN and non-EIGEN assets on EigenLayer. Contracts with investors required that investors be permitted to stake EIGEN and that any rewards be unlocked. The maximum all EIGEN stakers can get annually is 1% of total initial EIGEN supply. This is claimable weekly and takes a whole year to get linearly released. This 1% includes all EIGEN stakers, including investors,” Eigen Labs stated in a post.
The developers also noted that the investors were not eligible for stakedrops and prohibited the Eigen Labs and Eigen Foundation teams from participating but were allowed to stake from the first day.
As a result of this controversy, EigenLayer’s network growth has suffered significantly. This metric, which tracks the rate at which new addresses are formed on the network, is often used to measure a project’s traction.
Within 24 hours, network growth dropped by 91%, signaling that new investors are losing confidence. This decline in interest may be directly tied to the ongoing transparency controversy, which is creating hesitation among potential investors.
The drastic drop in new addresses is a worrying sign for EigenLayer’s future, as network growth is a key indicator of long-term success. If the project fails to address these transparency concerns, the token’s market position may weaken further.
EIGEN Price Prediction: Expect the Unexpected
EIGEN’s price plummeted from $4.15 to $3.34, marking a 19% decline within a single day after its listing. This sharp drop highlights the volatility and skepticism surrounding the token, especially following its debut on major exchanges.
While the bearish sentiment may persist, the likelihood of EIGEN reclaiming $3.75 as support remains low due to ongoing investor skepticism. This uncertainty could lead to further price drawdowns if confidence isn’t restored quickly.
Read More: How to Participate in an EigenLayer Airdrop: A Step-by-Step Guide
If EIGEN loses the $3.25 support level, the altcoin may face additional losses. However, breaching $3.47 and flipping $3.75 into support could invalidate the short-term bearish outlook and reignite investor interest. For now, market sentiment remains fragile, with investors closely monitoring transparency developments.
The post EigenLayer (EIGEN) Crashes 20% After Listing – Transparency Criticism Grows appeared first on BeInCrypto.
