Ethereum has spent the current bull market living in the shadow of Bitcoin, but two recent developments could thrust the world’s second biggest blockchain back into the spotlight. The first is the Securities and Exchange Commission’s surprise move to greenlight Ethereum ETFs. The second is a popular but divisive new investing feature called EigenLayer, which has received $100 million in backing from Andreessen Horowitz (a16z) Crypto.
EigenLayer is a new protocol, or set of instructions, that sits atop the main Ethereum blockchain. It offers a way for those who have already invested tokens by means of staking—a blockchain feature that rewards those who lock up their tokens to secure the network—the ability to “restake” those tokens. The term is what it sounds like. By restaking, users take Ethereum tokens they have already invested and then invest them again. But instead of receiving a reward from the Ethereum network, as happens with staking, those who restake get paid by other projects piggy-backing of the blockchain’s existing security pool.
