Venture capital company Andreessen Horowitz (a16z) has recently announced that it is leading a $100 million funding round for EigenLayer, the largest restaking protocol on Ethereum in terms of total value locked (TVL). According to a report by Bloomberg, a16z was the sole investor in this funding round. In March, EigenLayer had already completed a $50 million funding round led by Blockchain Capital.
In the fourth quarter of 2023, venture capital funding for crypto-related companies increased by 2.5% to reach $1.9 billion, as stated in a report by PitchBook. This marks the first rise in VC investments in the crypto sector since March 2022. PitchBook attributes this increase to the launch of the first spot Bitcoin (BTC) exchange-traded funds (ETFs) in January.
Ali Yahya, a general partner at Andreessen Horowitz, believes that this partnership could open the door to new types of applications. He expressed this sentiment to Bloomberg. EigenLayer, founded in 2021, allows 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 other decentralized finance (DeFi) protocols to generate additional yield.
With a TVL of $7.91 billion, EigenLayer currently ranks as the third-largest protocol on Ethereum. According to data from DefiLlama, EigenLayer’s TVL has seen a 4.30% increase in the 24 hours leading up to 2:15 pm CET and a staggering 347% increase in the past month.
EigenLayer’s TVL began to rise on February 5 after the protocol temporarily removed its staking cap in order to encourage organic growth. During this restaking window, EigenLayer’s TVL surged by over 181% to reach $6.05 billion on February 10, up from just $2.15 billion on February 5. Although a new staking cap was subsequently implemented, the project plans to remove this limit permanently in the future.
Restaking protocols currently rank as the sixth-largest category on DefiLlama, with a total TVL of $7.94 billion, with EigenLayer accounting for 98% of the category. Liquid staking protocols hold the top position, boasting a combined TVL of $45.7 billion.