With the help of Andreessen Horowitz’s a16z crypto venture capital arm, the cryptocurrency firm Eigen Labs raised $100 million for its EigenLayer crypto restaking protocol.
For a project that has been around for less than a year, its growth to become the fourth-largest protocol in decentralized finance is remarkable.
Eigen Labs, founded by Sreeram Kannan, offers an EigenLayer service that makes “restaking” easier. Staking is a component of the Ethereum blockchain’s proof-of-stake mechanism. It allows token holders to lock up their tokens and demonstrate their interest in the network’s security by acting as validators.
Sreeram Kannan oversaw the Blockchain Lab while serving as a professor at the University of Washington. EigenLayer’s initial staff members also occupied the lab.
In a blog post, Ali Yahya of a16z stated, “We’re excited to partner with Sreeram and the whole team on building a platform that unlocks a new dimension of open innovation on top of Ethereum.”
With a $357 billion total market capitalization, Ethereum is the second-largest blockchain, trailing only the bitcoin blockchain. With the September 2022 Merge, its blockchain transitioned from proof-of-work—which needs a great deal of computational power to validate and safeguard its network—to proof-of-stake. By doing this, the energy needed to operate the blockchain was significantly decreased, and staking was established as the method by which transactions are verified and protected on the network.