A new protocol has just been launched on the testnet that allows Ethereum validators and participants to “re-stake” their assets on other emerging networks.
However, the mainnet launch of the EigenLayer protocol is not expected until Q3, and testing will be done in three stages to bring in various players into the ecosystem. The first stage is to use the Ethereum Goerli testnet.
The project has some serious backing, and it announced a $50 million Series A funding round in late March led by crypto venture firm Blockchain Capital, along with Coinbase Ventures, Polychain Capital, Electric Capital, and Finality Capital Partner.
EigenLayer aims to become a decentralized marketplace for Ethereum node validators and operators to earn fees for additional services. It allows them to stake back the assets they received in exchange for staking Ether on platforms like Lido (stETH) and RocketPool (rETH). Assets can be reused to validate and secure other networks, such as sidechains or non-EVM blockchains.
According According to the white paper, EigenLayer also has plans to enable the reset of ETH withdrawn from Beacon Chain following the Shapella upgrade.
“Ethereum validators can configure their beacon chain withdrawal credentials for EigenLayer smart contracts and opt-in to new modules built on EigenLayer.”
The protocol aims to address issues with validator economic incentives. EigenLayer founder Sreeram Kannan said that facilitating the movement and relocation of ETH to other networks would incentivize validators and participants with additional returns and allow smaller networks to grow safely.
We are pleased to announce the release of the testnet for the first stage of the EigenLayer protocol, which supports native and liquid reset.
Please read the full details here: https://t.co/1eoriZOcwo
1/8 pic.twitter.com/xLs3CC2EOK
—OwnLayer (@ownlayer) April 6, 2023
In late March, Ethereum co-founder Joseph Lubin saying that “the Eigen Labs team is at the forefront of some of the most exciting work being done on Ethereum.”
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“Eigenlayer is a new paradigm for fostering protocol-centric innovation through a programmatic and decentralized marketplace of trust,” he added. High praise, but it’s worth noting that Lubin’s Ethereal Ventures fund has invested in EigenLayer.
There are currently 17.9 million ETH staked on the Beacon Chain, according to Ultrasound.Money tracker. At current prices, this is valued at around $33.6 billion, which is more than the full market capitalization of USDC. It represents almost 15% of the entire Ethereum supply.
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