We talked a few weeks ago about how the response to EigenLayer’s EIGEN airdrop led to a surge in the number of pending withdrawers on the platform.
There was some controversy surrounding the airdrop, including VPN restrictions and the initial non-transfer period imposed on the token, but a few days later the Eigen Foundation came out to expand the airdrop allocation and clarify some of the timings around the token. Improved unlocking and transferability has helped calm some fears.
It is possible that some users who only deposited into EigenLayer to farm airdrops were content to leave the platform after the snapshot was taken, as well as users who were angry about the initial EIGEN reveal.
But now we see the real impact of increased withdrawal queues. Because there is a 7-day escrow period before withdrawers can withdraw their funds, actual outflows on the platform are tracked with a delay of approximately a week compared to when withdrawals are initiated. The number of queued withdrawers first occurred on April 29, when EIGEN’s token economics were first announced, but we saw the actual number of withdrawers on EigenLayer skyrocket starting on May 6, after the escrow period ended.
But more than just withdrawals, we can now see more clearly the capital movements facing EigenLayer. The number of depositors on EigenLayer surged in mid-April after launching its mainnet and unsuspended deposits for its liquid staking tokens. So the increase in withdrawals wasn’t necessarily the cause of many problems for the restaking platform.
And the pressure so far appears to have been relatively manageable. Since May 6, there have been four days when daily net flows exceeded $45 million, meaning a significant amount of funds were leaving the platform. That $45 million is still tiny compared to EigenLayer’s TVL of about $15 billion, so the amount of funds securing the re-staking network hasn’t changed much.
Although net negative days have become more common since the launch of EIGEN, net positive days still occur, such as when the platform brought in $57 million on May 15th. Additionally, the initial surge in withdrawers appears to be subsiding, although daily levels still tend to hold. It will be higher than before the token was released.
However, now that EigenLayer has launched its mainnet, it is in a position to deliver the additional returns it previously promised to depositors. And EigenLayer is a re-staking platform with the largest secure network to date, making it the most attractive option for new services looking to bypass their own liquidity. EigenLayer is therefore well-positioned to help attract new services to increase additional rewards for depositors, which may be enough to encourage users to keep their money with the current protocol.
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