EigenCloud (EIGEN-USD), formerly EigenLayer, remains the dominant restaking protocol on Ethereum (ETH-USD). Yet its token tells a very different story. Restaking allows users to take ETH they’ve already staked to secure the Ethereum network and use it to help secure other decentralized applications at the same time. At its peak, more than $15 billion was deposited in the protocol.
While the total value has recently fallen to about $4.67 billion, the individual EIGEN token has lost more than 95% of its value since its high, and trades around $0.25. That’s why I remain neutral.
The protocol and the token are two different stories right now. One is dominant. One is in trouble. Figuring out which is which matters before you decide what to do with EIGEN.
The Rebrand and What It Actually Meant
In the rebranding exercise in June 2025, EigenLayer changed its name to EigenCloud. The team said the plan was bigger than restaking now. They wanted to build infrastructure where developers could run any kind of verifiable program, well beyond securing other blockchains. Eigen Labs initially raised $164.5 million in equity from top venture firms like Blockchain and Polychain Capital, anchored by a $100 million Series B from Andreessen Horowitz, one of the biggest names in venture capital.
Later, Andreessen Horowitz doubled down by purchasing an additional $70 million in EIGEN tokens to support the network’s rollout. That dual-backing — owning both the company and its tokens — shows that elite investors were making a massive long-term bet on the technology, even as liquid market prices dropped.
This is serious money from serious investors, and that context matters when you are trying to understand why a token down more than 95% still has an active development roadmap and people paying attention to it.
Restaking Simplified
When you stake ETH, you lock it up to help secure Ethereum and earn a yield. It does one job. EigenCloud asks what happens if that same ETH could do several jobs at once. A project that needs security, say a network that feeds real-world prices onto the blockchain, can borrow Ethereum’s existing staked capital instead of building its own security from scratch.
The staker earns extra yield. The project gets security it did not have to create. EigenCloud collects the fee in the middle.
EigenCloud has around 93.9% market share in restaking as of February 2026. Symbiotic and Karak split most of what is left. That share did not come from marketing or luck. Projects that built on EigenCloud have stayed there because switching is expensive and the protocol works.
Why the Token Hasn’t Followed the Protocol
The total value locked (TVL) is the amount of money sitting inside the protocol’s contracts. EigenCloud’s TVL is $4.67 billion. The token is worth around $0.25. Those two facts sit very uncomfortably next to each other, and the reason is straightforward. EIGEN has never had a clean mechanism to capture the value the protocol generates.
People use EigenCloud without needing to buy EIGEN. The protocol earns fees. The token does not automatically see any of that.
A governance proposal, EigenLayer Improvement Proposal 12 (ELIP-12), is meant to fix that. It is a formal plan submitted to the community for a vote. If passed, 20% of fees from subsidized services and all of EigenCloud’s own infrastructure fees would go into buying back EIGEN tokens, reducing supply and linking the token to real protocol usage.
While the proposal exists, it has not been passed yet. A buyback plan on paper is not the same as one running in production.
The Oversupply Problem Sitting on Top of All of This
Right now, there is a challenge due to oversupply. Monthly token unlocks are releasing far more supply onto the market than incoming buyers can absorb. On July 1, 2026, 36.82 million EIGEN tokens unlocked for early contributors and seed-round investors. Preceding the unlock, two partner wallets transferred 1.19 million tokens to Binance, a crypto exchange, on June 28.
This was a move typically signaling an intent to sell, which triggered an immediate market sell-off.
This is the pattern that has weighed on EIGEN throughout 2026. The protocol keeps building. The token keeps getting hit by supply coming out of lockup. Until ELIP-12 passes and starts buying back tokens, there is more EIGEN entering the market than there is demand for it. Good protocol news cannot fix a basic supply-and-demand mismatch.
What This Means for Ethereum and for EIGEN
For Ethereum holders, EigenCloud’s growth is genuinely good news. Every project that rents Ethereum’s security instead of building its own is saying that Ethereum’s infrastructure is worth paying for. That embeds ETH more deeply into how the broader ecosystem works. It gives staked ETH another income stream beyond just Ethereum’s own staking yield. That is a real change to the investment case for ETH, not a theoretical one.
EIGEN is a harder call. The token is cheap. The protocol is dominant. ELIP-12, if it passes and works, gives people a real reason to hold it beyond hoping the price goes up. However, the unlock schedule runs through 2028. Insider wallets sold into the market two days before the July unlock hit.
TVL has already dropped from $15 billion to $4.67 billion this year. For EIGEN to recover, the ELIP-12 proposal must pass and token buybacks must generate meaningful demand. The protocol must maintain its market share against competing restaking platforms while absorbing ongoing token unlocks through 2028.