EIGEN valuation napkin math: restaking demand and AVS fees
Thread311 words
Bullish call$EIGEN−94%since listing, moved against the callHow it played out ↓Back-of-envelope case that EIGEN at a $7.5B valuation is undervalued: a PE of 100 implies $75M earnings, or $150M annual protocol rewards if EIGEN earns half. That is reachable if AVSs pay 3-5% of inflation and have a $5B-$10B cumulative market cap.
Key claims
EIGEN at $7.5B valuation and PE of 100 implies $75M annual earnings
AVSs paying 3-5% of inflation need a $5B-$10B cumulative mcap to reach the $150M target
Around 100 teams are building AVSs, 30-40 publicly known
Why will $EIGEN go higher?
What's the link between @eigencloud and @eigen_da?
Highly (in)accurate napkin maths ⤵️
If we assume that the price of a native token is primarily key in the context of supplying security to the underlying network, it's in turn reasonable to assume that its value is driven by the demand for said security.
$EIGEN is currently trading around a valuation of $7.5B.
A high-growth PE ratio of 100 implies annualized earnings of $75 million for $EIGEN.
If $EIGEN earns 50% of total rewards with restaked $ETH earning the rest, EL would earn $150 million annually.
Assuming AVSs pay 3-5% of their protocol inflation to @eigencloud, a cumulative mcap of $5B-$10B would achieve this earnings target for the protocol.
@eigen_da doesn't have a separate token, but uniquely allows rollups to pay operators in their native token (if they opt in to provide DA in exchange). So @eigen_da will earn a bunch of different tokens, with which it will also pay for the security that @eigencloud provides.
@OmniFDN, another AVS with a live token currently trades at a fully diluted valuation of $1B. EL would only need a handful of similarly sized AVSs to justify its current valuation (not even counting @eigen_da).
Considering the fact that @eigencloud has probably around 100 teams building AVSs already (with 30-40 already publicly known at least), many of which will probably reach high valuations, it is reasonable to assume that $EIGEN is currently massively undervalued.
NFA tho and to answer @Capetlevrai's question wrt @eigen_da more directly: it's about the demand for the security that @eigencloud provides and ultimately what the consuming AVSs pay for that. EigenDA is a paying AVS, which hence accrues value back to $EIGEN and the @eigencloud protocol.
cc: @Louround_
@eigencloud @eigen_da If you're looking to DYOR on @eigencloud and $EIGEN, check the research report by @RedactedRes below! ⤵️
x.com/RedactedRes/status/1841003043166568557
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How the call played out · since 01 Oct 2024
Prices as of 23 Oct 2026This piece takes a view on $EIGEN, so that move is read against the call. Other assets it covers are shown as context, not as calls.
−94%
Moved against the call · since it listed on 02 Oct 2024, 1 day after this piece
- At listing
- $3.99
- Now
- $0.222
- vs BTC
- −96%
- After 1 month
- −31%
- After 3 months
- −12%
- After 1 year
- −62%
- High since
- +38% 17 Dec 2024
- Low since
- −96% 04 Apr 2026
Mentioned for context
Since then
Zero has written 2 more pieces on $EIGEN since this one.
- Is EIGEN undervalued? Short TL;DRBullish call on $EIGEN
- Is EIGEN undervalued? Intersubjective security and valuation mathBullish call on $EIGEN
Daily closes in USD from DefiLlama and Yahoo Finance. Only a bullish or bearish thesis is read as a call; explainers, maps and mentions are context. Not financial advice.