The new Ethereum protocol called EigenLayer is launching on the testnet and is gearing up for a mainnet launch in Q3 this year. This protocol provides the opportunity for Ethereum validators and stakers to re-stake their assets onto other emerging networks, allowing them to earn fees on additional services. Backed financially by Blockchain Capital, Coinbase Ventures, Polychain Capital, Electric Capital, and Finality Capital Partner, the protocol seeks to incentivize the validators and stakers with additional yields while at the same time facilitate the growth of other networks.

EigenLayer is expected to resolve the issues with current validator economic incentives primarily by allowing the moving and re-staking of Ethereum onto other networks. Founder Sreeram Kannan spoke highly of the project, suggesting that it would not only provide additional rewards for validators, but also allow smaller networks to have a more secure environment.

The whitepaper outlines plans for the protocol to also accommodate ETH withdrawn from the beacon chain following the Shapeshifter upgrade. Co-founder of Ethereum Joseph Lubin praised the project putting the team at the "forefront of some of the most exciting work happening in Ethereum," when the protocol was announced earlier this year.

Currently about 17.9 million ETH is staked on the Beacon Chain according to the Ultrasound.Money tracker, adding up to a value of around $33.6 billion, which is more than the market capitalization of USDC. This overall represents approximately 15% of the entire Ethereum supply.

The testnet version of EigenLayer has now been released and is awaiting further development before the mainnet launch in Q3 of 2021. This protocol has an expansive potential, and investors, developers, and traders alike should keep their eye on ongoing developments as the project matures.



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