Venture capital firm Andreessen Horowitz (a16z) has revealed that it will be leading a $100 million funding round for EigenLayer, the largest restaking protocol on the Ethereum network. This funding round was reportedly exclusive to Andreessen Horowitz, as stated in a Bloomberg report on February 22nd. EigenLayer had previously completed a $50 million funding round in March, which was led by Blockchain Capital.
According to a report from PitchBook, venture capital funding for crypto-related firms saw a 2.5% increase in the fourth quarter of 2023, reaching a total of $1.9 billion. This marks the first rise in VC investments in the crypto sector since March 2022. PitchBook suggests that the launch of the first Bitcoin exchange-traded funds (ETFs) in January could be attributed to this increase in crypto venture investments.
Ali Yahya, a general partner at Andreessen Horowitz, believes that this partnership with EigenLayer could open up new possibilities for various applications. In an interview with Bloomberg, he stated:
“EigenLayer’s innovative approach to restaking and liquid-staking derivative tokens presents exciting opportunities for the future. We are thrilled to be the sole investor in their latest funding round and look forward to supporting their growth.”
Established in 2021, EigenLayer offers a platform for validators and stakers to restake liquid-staking derivative tokens such as Lido Staked Ether (ETH) and RocketPool’s rETH in order to secure and validate other networks. These assets can also be utilized in decentralized finance (DeFi) protocols to generate additional yield.
EigenLayer currently holds the third position among Ethereum protocols, with a total value locked (TVL) of $7.91 billion. According to DefiLlama data, EigenLayer’s TVL has experienced a 4.30% increase in the 24 hours leading up to 2:15 pm CET and over 347% growth in the past month.
The rise in EigenLayer’s TVL began on February 5th, when the protocol temporarily removed its staking cap to encourage organic growth. During this restaking window, EigenLayer’s TVL surged by 181% to reach $6.05 billion on February 10th, up from just $2.15 billion on February 5th. While a new staking cap was subsequently implemented, the project plans to permanently remove this limit in the future.
Restaking protocols currently rank as the sixth-largest protocol category on DefiLlama, with a combined TVL of $7.94 billion. EigenLayer dominates this category, accounting for 98% of the total TVL. Liquid staking protocols hold the top position, with a combined TVL of $45.7 billion.
In summary, EigenLayer’s latest funding round led by Andreessen Horowitz demonstrates the growing interest in restaking protocols within the crypto sector. With its impressive TVL and potential for innovation, EigenLayer is poised to further solidify its position as a leading player in the Ethereum ecosystem.