Ethereum(ETH) ‘re-staking’ protocol EigenLayer launches on testnet

On the testnet, a new protocol that allows Ethereum validators and stakers to “re-stake” their assets onto other emerging networks has just been launched.

The EigenLayer protocol’s mainnet launch is not expected until Q3, and testing will be phased in three stages to onboard various participants into the ecosystem.

The Goerli testing network on Ethereum is used in the first stage. In late March, the project announced a $50 million Series A funding round led by cryptocurrency venture company Blockchain Capital, along with Coinbase Ventures, Polychain Capital, Electric Capital, and Finality Capital Partner. 

EigenLayer aspires to be a decentralized marketplace where Ethereum(ETH) node operators and validators can earn fees for providing additional services.

It enables them to reclaim assets obtained in exchange for staking Ether on platforms such as Lido (stETH) and RocketPool (rETH). Other networks, such as side chains and non-EVM blockchains, can use the assets to validate and secure themselves. 

EigenLayer also plans to enable restacking for ETH withdrawn from the beacon chain as a result of the Shapella upgrade, according to the whitepaper. “ETH validators can link their beacon chain withdrawal credentials to EigenLayer smart contracts and opt-in to new EigenLayer modules.” 

The protocol’s goal is to address concerns about validator economic incentives. EigenLayer founder Sreeram Kannan stated that allowing ETH to be moved and re-staked on other networks would provide additional yields to validators and stakers while allowing smaller networks to grow securely. We are pleased to announce the launch of the EigenLayer protocol’s first stage testnet, which supports liquid and native restacking. 

In late March, ETH co-founder Joseph Lubin stated, “The Eigen Labs group is at the forefront of some of the most exciting work happening in Ethereum(ETH).”  He went on to say, “Eigenlayer is a new paradigm for fostering protocol-centric innovation through a programmatic, decentralized trust marketplace.”  Although this is high praise, it is worth noting that Lubin’s Ethereal Ventures fund has made an investment in EigenLayer.

According to the Ultrasound. Money tracker, there are presently 17.9 million ETH staked on the Beacon Chain. This is worth around $33.6 billion at current prices, which is more than USDC’s entire market capitalization.  It accounts for nearly 15% of the total Ethereum supply. 

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