Business News Report
February 22, 2024

Andreessen Horowitz Invests $100 Million in Ethereum Restaking Protocol EigenLayer

In Brief

Andreessen Horowitz (a16z) invested $100 million in decentralized Ethereum restaking protocol EigenLayer to accelerate project’s development.

Andreessen Horowitz Invests $100 Million in Ethereum Restaking Protocol EigenLayer

Venture capital firm Andreessen Horowitz invested $100 million in the cryptocurrency startup EigenLayer, which is focused on developing a decentralized Ethereum restaking protocol. According to EigenLayer founder Sreeram Kannan, Andreessen Horowitz was the exclusive supporter in the funding round.

EigenLayer facilitates a process of restaking that has witnessed significant popularity in recent months. Restaking is derived from the Ethereum network’s (ETH) staking method, where tokens are deposited or “staked” to the network to facilitate the validation of transactions on the blockchain. Restaking enables emerging projects built on the Ethereum blockchain to utilize its security features for their own network operations.

Currently, EigenLayer provides a points system for users engaging in restaking through its platform, and the startup has no intentions to introduce any cryptocurrency token.

EigenLayer raised $50 million in a preceding funding round, with Blockchain Capital leading the investment.

Launched on the Ethereum mainnet last year, the first phase of EigenLayer‘s protocol enabled users to deposit liquid staking tokens (LSTs) from three staking projects: Lido, Rocket Pool, and Coinbase. The protocol has since expanded to include additional LSTs, such as Stakewise’s sETH, Mantle’s mETH, Frax’s sfrxETH, Ankr’s ankrETH, and Binance’s wBETH. EigenLayer recently reached approximately $6 billion in total value locked (TVL) as its uncapped deposits window concluded. EigenLayer is currently approaching the $8 billion mark in TVL, according to DeFiLlama.

Increasing Interest in Ethereum Restaking and Revitalizing VC Activity

The TVL for liquid restaking tokens exceeded $3.5 billion earlier this week, showcasing a rising interest in this niche among Ethereum investors.  

Affected by the announcement, the native token of Pendle Finance (PENDLE), a protocol tokenizing future yield on Ethereum, experienced a 13.22% increase in value within a brief timeframe and is currently trading at 2.87 USDT.

The news comes despite the substantial decline in venture funding, which reached its peak of $13.5 billion in Q1 2022. Last year, Andreessen Horowitz was among the leading contributors to cryptocurrency-related venture funding, according to PitchBook. Despite the overall trend, the firm managed to raise a record $4.5 billion cryptocurrency fund in 2022 and continues to actively seek investments in the cryptocurrency space.

The new investment in EigenLayer underscores the growing significance of the project, responding to heightened user demand for staking capital to earn rewards, while simultaneously highlighting the resurgence in venture capital activity.

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

More articles
Alisa Davidson
Alisa Davidson

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

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