EIGEN Unlocks at $7B FDV + Staking Update

Magic Eden’s Token Updates | ETH Price Slump

Marco Manoppo & Karon Pangestu
October 02, 2024

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Good Morning.

The market is down because of the geopolitical tensions in the past 24 hours. Ironically and unsurprisingly, crypto (including BTC), is merely seen as a super risk-on asset class. Capital flew to gold (and even Chinese equities!) amidst the increasing attention in the Middle East.

In Today's Email:

What Matters: $EIGEN unlocks at $7B FDV 🔐
Case Study: ETH price slump 📉
Governance & Features: $ME token updates 🪙

You read and share. We listen and improve. Send us feedback at marco@launchy.app.

Narratives: The crab market continues. Maybe you can watch the Thailand zoo for a new animal coin to trade.

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WHAT MATTERS

EIGEN $7B FDV and Staking Update

Karl_0x

State of play: EigenLayer has lifted transfer restrictions on its EIGEN token, allowing it to be traded on various exchanges. The token is now priced at around ~$4, resulting in a $7B FDV.

The circulating supply is expected to be approximately 109.2M tokens from an initial 1.67B supply distributed through two stakedrops.
The platform's total value locked currently stands at over $12B, down from its June peak of $20B.
Eigen’s reported float is 6.5%, resulting in a market cap of ~$440M, compared to ~$750M reported by CoinGecko.
The total EIGEN rewards to EIGEN stakers per year is limited to 1% of the total initial EIGEN supply, capping the total amount of annual emissions to EIGEN stakers.
Eigen Labs and Eigen Foundation each prohibited their teams from participating for at least one year

What’s next: After criticisms from the public, EigenLayer has updated its disclosures on the treatment of staking rewards.

Investors were NOT eligible for stakedrops based on EIGEN staking. Only with future programmatic incentives will they start to accrue rewards for EIGEN staking

Why it matters: The industry needs to be more transparent about what insiders can do with vested tokens. This is a great move done by the EigenLayer team.

Our take: Now, the market will decide if there are enough demands for restaked assets to incentivize ETH holders.

For builders and investors: Incorporating AVS into your stack can be useful, so long as you know where your core expertise is and how value will flow between your protocols and tokens.

Don’t use Eigen’s tech as your core offering, but use it as a complementary tool.

CASE STUDY

Ethereum's Current Price Slump

ETH Price (Source: CoinMarketCap)

Credits to WuBlockchain and Haotian for the original analysis

According to Haotian’s analysis, Ethereum's recent price slump can be linked to growing concerns around its L2 strategy, particularly following the Cancun upgrade.

Initially, there were high expectations for increased demand for Ethereum’s DA via L2 batch transactions, leading to ETH deflation.
However, the anticipated competition and Blob space utilization never fully materialized.
Blob usage is only about 80% utilized, and the DA costs for L2s account for just 0.3% of their total revenue, indicating limited economic impact on Ethereum.

While the Cancun upgrade successfully reduced fees, enabling L2s to grow with minimal costs, the low saturation of Blob space has prevented the Ethereum ecosystem from realizing the optimistic deflationary narrative.

In the long term, as L2 transaction volume increases, Blob space costs could rise.
This could potentially push some projects toward alternative DA providers or transition to L3 solutions.
The success of the Cancun upgrade has inadvertently dampened L2’s growth momentum, creating a need for a larger user base and ecosystem expansion to sustain Ethereum's L2 strategy.

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INSIGHTS

Inside the $3AC Token Launch

$3AC’s Owners Chart

Credits to 0xLouisT for the original analysis

Three Arrows Capital (3AC) launched a meme fund with a token, $3AC, raising 750 ETH (~$2M) from ~25 investors in a private pre-sale, involving groups like the Milady and bobocoineth teams.

The token’s launch saw 317 ETH allocated to Uniswap V2 liquidity, while the rest was dispersed across insider wallets, many of which profited up to 30x.
However, concerns have arisen due to 84% of the token supply being controlled by the team and insiders, with only 8% allocated to the community and liquidity each.
A 1% tax on trades is funneled into a team wallet, further consolidating control.
Despite these red flags, some presale investors have held onto their tokens, but buying in means trusting this insider-dominated structure.
Less than 25% of presale participant have sold their first distribution of $3AC.

FEATURES & GOVERNANCE UPDATE

Magic Eden’s $ME Token Updates

Magic Eden just announced that the $ME token will launch via a unique mobile token claim feature in the Magic Eden Wallet.

In October, a test token will be introduced to simulate the $ME claim process.
The test token will have no utility or value.
Upcoming milestones include sharing learnings from the test, announcing tokenomics, and the $ME TGE.

Other notable feature updates:

Coinshift goes live.
Citrea testnet goes live.
Aave has launched on Era.
Mango’s Fill City goes live.
Ledger now supports Scroll ZKP Network.
Chromia has implemented native staking for $CHR.
Pyth Network has launched Oracle Integrity Staking (OIS).

QUICK BITES

AAVE V3 surpasses $10B TVL.
Bitwise files for a spot XRP ETF.
Base lead Jesse Pollak to head Coinbase Wallet.
Robinhood introduces crypto transfers in Europe.
Arbitrum One surpassed 1B transactions since 2021.
DeFi leaders pen letter to VP Kamala Harris' campaign team.
Pike Finance's failed token launch has made investors upset.
World Liberty Financial says ‘thousands’ signed up for the whitelist.
FTX's reorg gains support from over 94% of Dotcom voting creditors.

NOTEWORTHY READS & MEME

Balaji’s read on AI and crypto, beyond cliches.
0xLouisT’s read on 3AC new memecoin token.
Davanti Research’s read on machine learning: the “so what” of crypto data ecosystems.

This has to be the final dip before the real bull run kicks off—before the *super cycle* begins, right? Right?! Right ?!??!!????????
— Molly (@bigmagicdao)
4:05 AM • Oct 2, 2024

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.