EIGEN Large Unlock Incoming: 10% Market Cap Dilution Each Month, Smart Money Exits Early

Original Author: Cryptor, On-chain Analyst
Original Translation: TechFlow

 

On October 10, the entire crypto market plummeted due to tariff news, with $EIGEN dropping as much as 53% in a single day, from $1.82 to $0.86. At first glance, this seems like yet another victim of a market flash crash, but the truth is far more complex.

In the past 30 days, 68% of the most profitable $EIGEN traders have already exited the market. They did not panic sell due to the October 10 tariff crash, but rather positioned themselves in advance to avoid the upcoming 24-month supply shock—the first unlock of which occurred on October 1.

I specifically checked on-chain data because my timeline was filled with overly optimistic headlines, narratives that did not align with price action.

In reality, EigenCloud's momentum is strong: it has partnered with Google, total value locked (TVL) has grown from $12 billion in August to $17.5 billion, Coinbase AgentKit integration has gone live, and both EigenDA V2 and multi-chain expansion are actively being developed.

But the problem is, starting November 1, over the next two years, about $47 million worth of $EIGEN tokens will be unlocked and flow into the market every month. In other words, every 30 days, 13% of the current market cap will enter circulation.

The most profitable traders have already seen this coming and exited the market early. Looking back at the past 30 days of data, smart money bought some low-priced chips after the flash crash, but this was mainly driven by a single whale investor, who, according to @nansen_ai, has since remained silent. Meanwhile, about $12.2 million flowed into exchanges last week.

The market crash on October 10 was just noise and distraction. The real signal lies in timing: who exited before October 1, who bought during the flash crash, and who is now staying silent.

Exit Patterns: September to October 2025

The most striking thing is: in the past 30 days, 68% of the top 25 most profitable $EIGEN traders have completely liquidated their positions. They didn't just take partial profits—they exited entirely.

The top performer, "crashman.eth," achieved a 272% return on investment (ROI) and now holds no tokens. The second place exited after a 97% return, and the third left after a 91% gain. This pattern repeats throughout the leaderboard.

Only 8 of the top 25 traders still hold $EIGEN, and their average "holding ratio" is just 30%. Even these remaining holders have cut their peak positions by 70%.

This data is more meaningful than ROI. High returns paired with low holding ratios indicate that early confidence has shifted to caution. These exits began in mid-September, weeks before the October 10 flash crash, when prices were still above $2.

These traders clearly saw the unlock schedule and exited in advance.

Token Flows

The timeline coincides with the first unlock event on October 1, when $EIGEN became tradable after months of restrictions. Two days before the initial 36.82 million $EIGEN unlock, the price had already dropped 26%.

Top traders acted before this event, selling tokens into exchanges. On the surface, it looked like the market was accumulating chips, but in reality, it was systematic distribution. At least from on-chain data, I believe this is a reasonable interpretation.

Capital flows over the past 7 days show another $12.32 million worth of $EIGEN flowing into exchanges, including $3.44 million from these top profitable traders.

Contradiction: A Smart Money Whale Buys the Dip

Smart money holdings increased by 68% last month, from 1.4 million to 2.36 million tokens. However, the turning point is that more than half of this increase came from a single wallet, which currently holds 1.23 million $EIGEN.

This whale bought steadily through September, sold near the October 1 unlock low, then bought back at higher prices, and added again after the October 10 flash crash.

While this staggered buying pattern is a bit odd, more importantly, it does not represent broad smart money consensus. The rest of the smart money holdings are spread across dozens of wallets, totaling about 1.2 million $EIGEN, which is not convincing to me. Smart money holds only 0.13% of total supply.

Furthermore, in the past 24 hours, there has been no smart money activity or other significant capital inflows. Even that whale has remained silent.

Meanwhile, as more top profitable accounts (Top PnL wallets) take profits and move tokens to exchanges, $EIGEN's price continues to fall. This trend can be seen in the right column of the screenshot above.

There are two ways to interpret this silence:

· Bullish view: Confidence. Choosing to hold, riding out volatility, waiting for fundamentals to catch up.

· Bearish view: Uncertainty. Even at lower prices, there isn't enough confidence to keep adding.

We'll find out on November 1.

The $47 Million Monthly Dilemma

Because on November 1, the next challenge is coming: more unlocks.

The unlock schedule is public information; it's no secret. But few seem to pay attention to its actual meaning or put it in a meaningful context.

The October 1, 2024 unlock removed transfer restrictions and started a one-year cliff period.

On October 1, 2025, the first batch of 36.82 million $EIGEN will be unlocked. Then, starting November 1, 2025, 36.82 million will be unlocked every month for about 23 months, until September 2027.

At current prices, every 30 days, $47 million worth of tokens will enter the circulating market. With the current market cap (at the time of writing, $490 million), these monthly unlocks represent about a 10% dilution rate. That's a huge pressure.

Currently, only 23% of tokens are in circulation, and the fully diluted valuation (FDV) to market cap ratio is 4.5x, meaning 77% of tokens are still locked.

The top 10 holding addresses control 50% of the token supply. Most of these are held in protocol wallets, exchange reserves, and VC allocations, all subject to the same unlock schedule.

This means the next two years will see continuous selling pressure, not a one-off event.

Those who exited in September did so not because of price action, but to preempt a known date of supply shock.

Protocol vs. Token: Why Both Can Be True

Ironically, as a protocol, EigenCloud is actually performing well.

TVL has reached $17.5 billion (up from about $12 billion in August). It has partnered with Google Cloud for AI payment verification. Coinbase AgentKit integration supports verifiable blockchain agents. The slashing mechanism went live in April. EigenDA V2 launched in July. Multi-chain expansion is also actively underway.

Development is real, adoption is growing, and the infrastructure logic is being realized.

But strong fundamentals can't erase poor tokenomics. These are two separate issues. Even though a token belongs to a project, it doesn't mean the two will develop in sync.

$EIGEN's growth story is colliding head-on with a heavy, multi-year unlock cycle that hasn't even fully started yet. That's why I always separate product analysis from token analysis—they rarely move in sync, especially during the vesting period.

For the token to succeed, the protocol must generate enough real demand to absorb $47 million in new supply every month.

Even for a project like EigenCloud, with real traction and scale, that's a high bar.

November 1: The Real Stress Test

I don't know who will win this battle: protocol growth or supply pressure.

But what I do know is that the data tells us some facts. Once again, my timeline is filled with (the only) bullish $EIGEN news. Does this feel familiar? Those who follow me should know which cases I'm referring to.

For $EIGEN, profitable traders exited weeks before the first unlock, with the most successful leaving when prices were still above $2. A smart money whale bought heavily during the crash, but then went completely silent. Exchange inflows have continued to rise ahead of the next unlock window.

The tariff-driven market crash on October 10 drew everyone's attention, but the real story is about wallet positioning around the 24-month unlock schedule, which will officially accelerate on November 1.

Pattern recognition insights:

When the "Still Holding %" of top performers drops below 30%, when exchange inflows spike relative to market cap, and when major cyclical unlocks are approaching, that's usually not your entry signal.

November 1 is the next monthly test of this supply cycle. We'll see whether the whale's confidence pays off or the early sellers were right.

Watch these indicators:

• · Changes in smart money positions, and whether more wallets are increasing their holdings.
• · Whether other groups (such as the top 100 holders, top profitable accounts, whales, and funds) are accumulating.
• · Exchange flow velocity (will the weekly $12 million inflow speed up?)
• · Number of active wallets (are new participants entering, or is it just existing holders rotating?)

This framework applies to any token with an unlock schedule. The methodology here is more important than any single trade.

On-chain data gives you the same information that institutions and funds have. The difference is whether you know where to look before the market finds out.

If you do? Then you've already outperformed 99% of crypto Twitter users.

 

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