A major venture firm, Andreessen Horowitz invested $100 million in EigenLayer, a crypto startup led by Sreeram Kannan, confirmed by Eigen Labs in a thread on the social media platform X.
EigenLayer specializes in “restaking,” a process based on Ethereum’s method where tokens are staked to enhance network security. The startup allows projects building on Ethereum to leverage its security for their networks.Â
Additionally, EigenLayer expressed excitement about partnering with a16z crypto, citing reasons such as a commitment to research, including open source, long-term support across the crypto industry stack, and deep alignment with the concept of “Eigen.
This investment follows a $50 million funding round in March, with Andreessen Horowitz being the sole backer. EigenLayer’s restaking protocol facilitates validators and stakers to secure and validate other networks, earning rewards.
Despite regulatory scrutiny on staking, Kannan clarified that EigenLayer acts as a marketplace, not directly involved in staking. The venture firm believes EigenLayer will enable new applications, with General Partner Ali Yahya expressing its significance in the crypto industry.
As of now, EigenLayer offers a points system for restakers, and while no crypto token launch is planned, potential monetization paths include traditional models or tokens.
EigenLayer is Ethereum’s third-largest protocol, boasting a Total Value Locked (TVL) of $7.84 billion. VC funding for crypto firms increased by 2.5% in Q4 2023 to $1.9 billion, marking the first rise since March 2022, potentially influenced by the launch of spot Bitcoin ETFs.
The substantial investment in EigenLayer underscores the growing confidence in Ethereum’s ecosystem despite regulatory challenges, highlighting the evolving landscape of decentralized finance and its potential impact on traditional finance.
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