From a16z by Ali Yahya

It’s exceedingly rare to come across a founder with a vision and plan that has the potential to change everything. I have come to know EigenLayer founder Sreeram Kannan to be not only brilliant, but also fundamentally motivated by a vision of the future so crisp and compelling that it momentarily becomes real when you talk to him. Sreeram has what I like to call the Promethean flame; he is driven to bring a new technology to life first and foremost because of the future it will create.

I first met Sreeram in 2019. At the time, he was still an associate professor at the University of Washington and getting started on his journey as an entrepreneur. Sreeram made a strong impression, and since then we’ve had many touchpoints through the years with both him and the world-class team that he has brought together. In 2022, Sreeram gave an eye-opening talk in our summer research fellowship about EigenLayer and EigenDA, and last year, he and Soubhik, EigenLayer’s head of protocol research, published a comprehensive overview of the Cryptoeconomics of Slashing on our blog.

Today, it’s a pleasure to announce that we’re leading EigenLayer’s Series B. We’re excited to partner with Sreeram and the whole team on building a platform that unlocks a new dimension of open innovation on top of Ethereum.

Background

It’s difficult to appreciate the full breadth of EigenLayer without first zooming out: In the beginning, there was Bitcoin. It was the first example of an entire blockchain that was built for the purpose of a single application, which at the time was ostensibly payments, but since then has turned out to be more like digital gold—a store of value, albeit a volatile one.

The genius of Ethereum was to unbundle the monolithic, single-app Bitcoin approach by separating consensus from the application logic that is built on top. Ethereum makes it possible for developers to write their own applications—in the form of smart contracts—that leverage the blockchain’s pooled security and computational resources. This change alone unlocked a huge design space for open innovation which has led to almost everything we know and love about the space today. It means that people can now build decentralized applications without having to spin up their own blockchains.

Ethereum’s greater level of programmability has been a huge unlock for a whole set of applications. But, it’s not without limitations. It still mandates a lot about what you can and cannot do as a developer. For example, the code you write must be compatible with the Ethereum Virtual Machine (EVM), which will continue to be a great computational model for certain applications—those that are lightweight enough to fit within Ethereum’s block-size and gas limits—but not for others that might be heavier-weight or need specialized features.

In an ideal world, you as a developer should have almost complete freedom. If you need to, you should be able to build a decentralized service with code for any instruction set, your own consensus mechanism, your own data propagation algorithm, your own block time and gas limits, and even your own set of hardware requirements for validators (like GPUs or trusted execution environments). You would be able to do all of that without having to spin up your own blockchain network from scratch. Instead, you would be able to build on top of the already decentralized and secure validator set of the most secure programmable blockchain: Ethereum.

Enter EigenLayer

EigenLayer is a set of smart contracts on Ethereum that creates a two-sided marketplace for raw cryptoeconomic security: On the demand side, it allows creators of custom decentralized services to write code that effectively extends the functionality of Ethereum. And, on the supply side, validators participating in Ethereum consensus—if they happen to have the capacity and required hardware—can opt into running each of those decentralized services by restaking their ETH to them. The net result is that EigenLayer is a decentralized and market-based mechanism for extending Ethereum’s capabilities.

The implications of this are profound. We believe that, by further unbundling cryptoeconomic security from the EVM, EigenLayer has the potential to unlock 100x faster innovation on technologies like consensus mechanisms, novel virtual machines, decentralized oracles, bridges, and networks with specialized hardware in the same way that Ethereum unlocked 100x faster innovation at the application logic level by introducing smart contracts. 

We’re very excited to partner with Sreeram and team to help them bring this vision to life.