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a16z: Why We Invested in EigenLayer.

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Founder of EigenLayer, Sreeram, is not only talented but also has a clear and captivating vision for the future. He possesses what I call the "fire of Prometheus."

Original Title: "a16z: Why Invest in EigenLayer"

Original Author: Ali Yahya, General Partner at a16z crypto

Translation: Karen, Foresight News

Very few people have both the foresight and the potential to drive change. Sreeram Kannan, the founder of EigenLayer, is not only talented and intelligent, but fundamentally, his vision for the future is clear and captivating, to the point where this vision becomes instantly real when talking to him. Sreeram possesses what I call the fire of Prometheus, driving new technology to create a brand new future.

I first met Sreeram in 2019 when he was still an associate professor at the University of Washington and had just embarked on his entrepreneurial journey. Sreeram left a deep impression on me, and since then, we have had many interactions with him and his world-class team. In 2022, Sreeram gave an inspiring lecture on EigenLayer and EigenDA in our summer research scholarship, and last year, he and Soubhik, the lead researcher of the EigenLayer protocol, published a comprehensive overview of Slashing Cryptoeconomics on our blog.

Today, we announced that we are leading the Series B financing round for EigenLayer and are excited to collaborate with Sreeram and the entire team to build a platform that opens up new dimensions of innovation on top of Ethereum.

Background

To fully understand the overall picture of EigenLayer, we first need to broaden our perspective: we can start with Bitcoin.

Bitcoin is the first example completely built on blockchain technology. Its original intention was to serve as a payment method, but it gradually evolved into a value storage method more like digital gold, despite its high volatility.

The genius of Ethereum lies in its deconstruction of the holistic approach of a single application like Bitcoin by separating the consensus mechanism from the application logic built on top of it.

Ethereum enables developers to write their own applications in the form of smart contracts, leveraging the shared security and computing resources of the blockchain.

Only this change has released tremendous design space for open innovation, and almost all of the content we know and love today comes from this. This means that people can now build decentralized applications without launching their own blockchain.

Ethereum's higher programmability is a huge breakthrough for a range of applications. However, it is not without limitations. As a developer, there are still many rules that restrict what you can and cannot do.

For example, your code must be compatible with the Ethereum Virtual Machine (EVM). For some lightweight applications, the EVM is still a good computational model because it is suitable for Ethereum's block size and gas limit. However, for other applications that may be more complex or require specific functionality, the EVM may not be suitable.

In an ideal world, as a developer, you should have almost complete freedom.

If necessary, you should be able to write code for distributed services using any instruction set, with your own consensus mechanism, data propagation algorithm, block time, and gas limit. You can even set requirements for validators (such as GPUs or trusted execution environments) based on your hardware requirements.

You can accomplish all of these tasks without having to build your own blockchain network from scratch. Instead, you can build on the most secure programmable blockchain that already has a decentralized and secure validator group: Ethereum.

Enter EigenLayer

EigenLayer is a set of smart contracts on Ethereum that creates a bilateral market for the security of the raw crypto economy. On the demand side, it allows creators to write code that effectively extends the functionality of Ethereum. On the supply side, validators participating in Ethereum consensus (if they happen to have the ability and required hardware) can choose to run these distributed services by re-mortgaging ETH. Overall, EigenLayer is a decentralized and market-driven mechanism for extending Ethereum's capabilities.

The significance of this mechanism is far-reaching. We believe that by further deconstructing the relationship between cryptographic economic security and EVM, EigenLayer has the potential to achieve 100 times the innovation speed in consensus mechanisms, new virtual machines, decentralized oracles, bridges, and networks with dedicated hardware. This is similar to how Ethereum achieved 100 times the innovation speed in the application logic layer by introducing smart contracts.

We are very excited to collaborate with Sreeram and his team to help them achieve this vision.