MEXC Exchange/Learn/Market Insights/Hot Topic Analysis/Ethereum Rally Fuels Restaking Momentum: EIGEN Gains Over 27% in a Week

Ethereum Rally Fuels Restaking Momentum: EIGEN Gains Over 27% in a Week

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Aug 21, 2025MEXC

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As ETH broke through the key $4,600 level, the broader Ethereum ecosystem saw a strong market-wide upswing, with EIGEN standing out in particular. Over the past seven days, EIGEN's price climbed from around $1.10 to nearly $1.46, marking a gain of approximately 27%. Despite several short-term pullbacks along the way, the overall trend remained steadily upward, reflecting strong market momentum and growing investor confidence.

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1. What Is EigenLayer (EIGEN)?

EigenLayer is a protocol built on the Ethereum blockchain that introduces an innovative mechanism called restaking. It allows users to reuse already-staked ETH by opting into smart contracts that extend their staked assets to provide security and validation services for additional modules or applications. This forms what is known as a restaking collective. Through this system, EigenLayer connects emerging applications that seek Ethereum-level security with stakers who are willing to offer additional security, injecting a new layer of trust liquidity into the ecosystem.

EIGEN is the native utility token of the EigenLayer ecosystem. It plays a critical role in governance, security modeling, and economic incentives. Token holders can participate in securing the network and also receive rewards from ecosystem incentives, creating a positive alignment of interests within the protocol.

2. Operating Mechanism of EigenLayer (EIGEN)

The core operational flow of EigenLayer includes the following components:

2.1 Restaking

Users can restake already-staked ETH or corresponding liquid staking tokens (such as stETH) into EigenLayer smart contracts. These assets are aggregated into a unified security pool that provides security guarantees for various applications, known as modules or Actively Validated Services (AVS).

2.2 Modular Security

EigenLayer adopts a modular security model, allowing stakers to independently choose which modules to support, such as decentralized storage, game asset protection, DeFi protocols, and more. This modular design improves flexibility and scalability.

2.3 Staking Methods: Native and Liquid Staking

EigenLayer supports two forms of staking:

1) Native restaking: Restaking directly staked ETH into EigenLayer.

2) LST restaking: Restaking liquid staking tokens issued by other staking protocols.

2.4 Dual Authorization Structure

When performing restaking, users must authorize through smart contracts, while modules or AVSs (or their node operators) must agree to accept the staked contributions. This two-way authorization mechanism ensures both security and transparency.

3. In-Depth Analysis of EIGEN's Price Surge

3.1 Altcoin Rally Driven by Ethereum Ecosystem Growth

EIGEN's price increase is not an isolated event but is closely tied to the broader expansion of the Ethereum ecosystem. Since Ethereum's transition to proof-of-stake (PoS) and the continued development of its surrounding infrastructure, innovations like restaking have emerged as new market highlights, attracting significant capital and attention.

As one of the cornerstones of the crypto market, ETH's price movements and ecosystem activity often drive the broader appreciation of ETH-related tokens. EIGEN, as a key protocol in the restaking sector, plays a critical role in building AVS infrastructure, combining security with efficiency. This positioning has strengthened market expectations for its long-term value.

3.2 Strong Restaking TVL Growth and Broad Market Participation

As of the end of July, EigenLayer's total value locked (TVL) surpassed $25 billion, firmly establishing it as the leading protocol in the restaking space. According to a report by Cointelegraph, institutional interest in restaking continues to rise, with EigenLayer widely regarded as the core protocol in the sector. As institutional capital continues to flow in, demand for the EIGEN token is expected to grow further, providing ongoing price support and momentum.

3.3 a16z Doubles Down, Boosting Confidence and Ecosystem Expansion

On July 9, Eigen Labs announced a layoff of approximately 25% of its staff and a strategic shift to concentrate resources on its new developer-focused platform, EigenCloud. This move attracted a fresh $70 million investment from a16z. EigenCloud integrates EigenDA, EigenVerify, and EigenCompute, aiming to provide a unified trust infrastructure for both on-chain and off-chain applications.

This restructuring and substantial capital injection have given EigenLayer a powerful boost. The investment not only enhances the project's technical capacity and innovation potential but also strengthens market confidence in the EIGEN token. Investors are optimistic about EigenCloud's development prospects and believe it will bring more innovative use cases and value to the Ethereum ecosystem, thereby supporting further appreciation of the EIGEN token.

3.4 Technical Setup Suggests Potential Support

From a technical analysis perspective, although EIGEN reached a low in early 2025, it has since entered a bottoming phase and appears to be forming a descending wedge pattern. If buying pressure increases, the price may return to the 2 USDT level, with the potential to test the 3-4 USDT range in the next upward move.

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4. Conclusion

EigenLayer is steadily solidifying its position within the Ethereum ecosystem. Its restaking model, known for capital efficiency, modular design, and shared security, is emerging as a key force in empowering future on-chain infrastructure. At present, with rising token prices, growing TVL, and increased institutional backing, EIGEN is showing strong signs of a potential resurgence.

Looking ahead, if the Ethereum ecosystem continues to evolve and the restaking model gains broader adoption, EIGEN's market position and price performance may reach new heights. It is well-positioned to become a critical component of Ethereum's "post-Ethereum" infrastructure era, bringing further innovation and value to the broader crypto market.

In summary, from technical design to market performance and ecosystem development, EIGEN remains a strong contender in the restaking space. While market risks still exist, its clear value proposition, innovative model, and wide participation make it a key asset worthy of close attention and ongoing research. Investors should stay informed, understand the associated risks, and make well-considered decisions when engaging with EIGEN.

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