Eigenlayer (EIGEN)

Security and Staking

Eigenlayer allows users to restake their Ethereum (ETH) to secure multiple protocols at once. This means the same staked ETH can protect Ethereum and other networks or services, increasing security without needing new validators.

Middleware Services

It supports middleware like data availability layers, decentralized sequencers, oracles, and bridges. These services rely on Eigenlayer to use Ethereum’s security for their operations, helping reduce costs and improve efficiency.

Layer 2 and Cross-Chain Use

Eigenlayer helps Layer 2 solutions and cross-chain applications by providing a shared security layer. This enables features like cross-rollup NFT minting, lending, and margin trading, making it easier to build and use decentralized apps across different blockchains.

Innovation and Customization

Protocols can customize their architecture while leveraging Ethereum’s trust network through Eigenlayer. This opens up new possibilities for decentralized applications, including faster off-chain computations for AI, gaming, and other advanced use cases.

Pros

• Allows Ethereum stakers to re-stake their ETH to secure multiple services, increasing capital efficiency and earning more rewards.
• Supports both solo staking and delegation, making it accessible for users with different technical skills.
• Enables new projects to benefit from pooled security without building their own validator base, lowering startup costs.
• Encourages innovation by allowing permissionless development of new validation services.
• Introduces continuous monitoring and threat detection to maintain network integrity.

Cons

• Re-staking can lead to security fragmentation as capital is spread across multiple protocols.
• Requires users to actively manage or understand multiple staking layers, which might be complex for some.
• Potential dilution of security if too many protocols share the same staked ETH.
• Some users may prefer simpler staking options offered by exchanges, which Eigenlayer’s model does not fully replace.
• New technology means some uncertainty about long-term effects and adoption.

Founders

Eigenlayer was founded by Sreeram Kannan, a former professor at the University of Washington who led the university's Blockchain Lab. He holds a PhD in Information Theory from UC Berkeley.

Leadership

Sreeram Kannan is also the CEO and the main driving force behind Eigenlayer.

Major Investors

Eigenlayer has raised $171 million over 3 funding rounds from 27 investors. Key investors include Andreessen Horowitz (a16z), Blockchain Capital, Polychain Capital, Hack VC, Coinbase Ventures, and Electric Capital.

Funding Highlights

• The latest funding round was a $100 million Series B led by Andreessen Horowitz in February 2024.
• Earlier rounds included investments from Blockchain Capital, Polychain, Hack VC, and others.

Additional Investors

Other notable investors involved across rounds include Delphi Ventures, Lemniscap, Mirana Ventures, RAA Ventures, and Finality Capital.

These investors support Eigenlayer’s mission to enhance Ethereum’s security and scalability through restaking technology.

Halal Status

Yes, Eigenlayer is generally considered halal because it is a liquid staking protocol built on Ethereum that allows users to restake ETH to support decentralized services. It focuses on providing technological utility and network security without involving interest (riba) or gambling elements, which aligns with common criteria for halal crypto projects.

Reasoning

The protocol’s main function is restaking ETH to secure additional applications, which is seen as a legitimate service rather than speculative trading or interest-based earning. This practical use and contribution to blockchain security support its halal classification.