EigenLayer goes live on Ethereum with initial $17 million LST deposit limit

Quick Take

  • Re-staking protocol EigenLayer has launched on the Ethereum mainnet.
  • The protocol will initially have a limit of 9,600 liquid staking tokens, worth around $16.7 million.

Re-staking protocol EigenLayer launched on Ethereum today, enabling holders of liquid staking tokens to double down for additional yield — at the cost of extra risk.

The core idea behind EigenLayer is that the staking security provided by ether stakers can be used to secure other protocols on the network. To use it, holders of liquid staking tokens — like Lido staked ether (stETH) — can stake these tokens through EigenLayer. This means that the token holders will gain extra rewards from the newer protocols they’re supporting, but it opens them up to more risk of penalties through slashing.

“This is a significant step forward for Eigenlayer and we are excited to build the future of shared security together to work to hyperscale Ethereum,” the project's team said in a press release.

At launch, EigenLayer will support native staking of ether plus liquid staking tokens stETH, Rocket Pool ether (rETH), and Coinbase's wrapped staked ether (cbETH). 

The protocol commences operation with some capacity limits. For example, it will only allow 3,200 tokens for each liquid staking token, creating a total limit of 9,600 liquid staking tokens. At ether's current price, that's a limit of around $16.7 million. The protocol will only let each crypto wallet deposit a maximum of 32 tokens, resulting in at least 300 deposits from separate wallets. 

Those who are staking their ether directly can also choose to use EigenLayer. This approach is accomplished through the creation of what’s called an EigenPod. The number of pods will be capped but not the number of staked ether.

“These limits will be raised progressively over the coming weeks and months, with the goal of reaching a totally open and uncapped state where any user can restake any amount of staked Ether,” said EigenLayer.

EigenLayer previously raised $64.5 million, including a $50 million Series A in March. The startup said today that its Series A raise was at a $500 million valuation, confirming The Block’s reporting ahead of the raise. Its backers include Blockchain Capital, Coinbase Ventures, Polychain Capital, Hack VC and Electric Capital. 

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