Eigen Labs, developer of EigenLayer – the cryptocurrency restaking project on top of Ethereum that’s shaking the decentralized financial landscape, even though it isn’t yet live – raised $100 million in venture capital from a16z Crypto.

Eigen Labs has confirmed its investment on social media platform X.

ETH Price Index and Live Chart – CoinDesk”>(ETH) tokens that are deposited or “staked” as security for the main blockchain can be repurposed to secure additional networks and protocols.

EigenLayer temporarily raised its deposit cap earlier this month. This was due to the growing interest of new users in the protocol. DefiniLlama reports that it has risen to almost $8 billion of total value locked.

The new liquid restaking protocols, such as Ether.fi, and Puffer have also been built on EigenLayer. These platforms store assets with EigenLayer, and give their users tradeable receipts known as “liquid Restaking Tokens” (LRTs), that are rapidly becoming the most popular assets in DeFi. Ether.fi is the largest liquid-restaking protocol. It launched last year, and as of Thursday, it boasted over $1.4 billion worth of TVL. Puffer, launched just three weeks ago, has also reached $1 billion in deposits this week.

The recent hype surrounding EigenLayer is happening before the platform launches any of its active validated services. These are the third-party network that will be using EigenLayer for their security and ultimately paying out “restaking interests” to the platform’s depositors.

EigenDA will be the first AVS to launch in later this year. It is a data accessibility blockchain developed by Eigen Labs.

The EigenLayer ecosystem may have caught the eye of many, but some Ethereum developers warn that the “shared-security” model could strain the Ethereum network. Ethereum co-founder Vitalik Buterin published a blog on May 20, 2023, about the “high risks systemic to the ecosystem” restaking poses.

Read more about how Liquid Restaking tokens, or “LRTs”, revived Ethereum DeFi. Can the hype last?

UPDATE (Feb. 22, 16:03 UTC): Adds additional information about Eigenlayer

Sheldon Reback is the editor.