a16z invests $100 million in EigenLayer – Report

Venture capital firm Andreessen Horowitz (a16z) announced a $100 million funding round in EigenLayer, Ethereum's largest reconfiguration protocol by Total Value Locked (TVL).

According to a Feb. 22 Bloomberg report, the venture firm was said to be the sole investor in the funding round. EigenLayer Protocol completed a $50 million round of funding led by Blockchain Capital in March.

Venture capital (VC) funding of crypto-related firms rose 2.5% to $1.9 billion in the fourth quarter of 2023, according to a Pitchbook report. This marks the first increase in VC crypto investments since March 2022. The surge in crypto venture investments can be attributed to the January launch of Bitcoin exchange-traded funds (ETFs).

According to Ali Yahya, general partner at Andreessen Horowitz, the partnership could pave the way for new types of applications. He told Bloomberg:

“It allows all kinds of new applications to be built… People share capital to reap the rewards of new services coming out on EigenLayer.

In the year EigenLayer, founded in 2021, allows other networks to secure and verify the underlying tokens when they deposit liquidity, such as Lido's Staked ETH and RocketPool's reETH. These assets can be deployed in other Decentralized Finance (DeFi) protocols to generate additional revenue.

EigenLayer is currently the third largest protocol on Ethereum, with a TVL of $7.91 billion. EigenLayer's TVL increased by 4.30% in the 24 hours to 2:15 PM CET and more than 347% in the last month, according to Defillama data.

According to an official announcement, EigenLayer's TVL started to rise on February 5 after the protocol temporarily removed the savings cap to encourage organic growth. During this restocking window, EigenLayer's TVL jumped over 181% to $6.05 billion from just $2.15 billion on February 10.

Replication protocols are the sixth-largest protocol category on Defilama, with a total TVL of $7.94 billion, of which EigenLayer accounts for 98%. The liquid staking protocol is in its early stages, with a combined TVL of $45.7 billion.

Related: EigenLayer Becomes 4th Largest Reworking Protocol, Closes to $7 Billion TVL