Andreessen Horowitz (a16z), a venture capital firm, has secured $100 million in funding for EigenLayer, the largest restaking protocol on the Ethereum blockchain.
Bloomberg reported that the venture capital firm was the sole investor in the funding round on February 22. In March, Blockchain Capital assisted in completing a $50 million funding round for the EigenLayer protocol.
PitchBook reports that venture capital (VC) funding for crypto-related companies increased by 2.5% to $1.9 billion in the fourth quarter of 2023. Since March 2022, this is the first increase in cryptocurrency venture capital investments.
PitchBook identifies the January introduction of the first spot Bitcoin exchange-traded funds (ETFs) as a factor in increased venture capital investments in cryptocurrencies.
Ali Yahya, the general partner at Andreessen Horowitz, opined that the collaboration may facilitate the development of novel application categories. He communicated with Bloomberg:
“It will enable the development of an infinite variety of novel applications… Individuals will allocate capital as collateral, expecting to receive rewards from newly launched services on EigenLayer.
Established in 2021, EigenLayer facilitates the retaking of liquid staking derivative tokens by stakers and validators, such as Lido Staked ETH and RocketPool’s rETH, to validate and safeguard other networks. These assets have the potential to generate further returns when utilized in other decentralized finance (DeFi) protocols.
With a TVL of $7.91 billion, EigenLayer is the third-largest Ethereum protocol. As of 2:15 PM CET, EigenLayer’s TVL increased by 4.30%, and it has surpassed 347% over the past month, according to data from DefiLlama.
According to an official announcement, EigenLayer’s TVL increased on February 5 after the protocol temporarily removed its staking limit to encourage organic growth.
EigenLayer’s TVL increased by more than 181% during this restaking period, from $2.15 billion on February 5 to $6.05 billion on February 10. Notwithstanding the implementation of a novel staking limitation, the undertaking intends to eliminate this restriction permanently.
DefiLlama ranks restaking protocols as the sixth most significant category, comprising a collective TVL of $7.94 billion, of which EigenLayer represents 98%. The liquid staking protocol leads the pack, which has a total TVL of $45.7 billion.
