Ethereum's re-staking protocol is approaching its first testnet phase.
EigenLayer, a groundbreaking protocol designed to allow Ethereum validators and stakers to re-stake their assets on emerging networks, has recently launched on testnet.
The mainnet release of EigenLayer is expected in the third quarter of 2023. However, the process will have a three-stage testing procedure designed to progressively onboard different participants into the ecosystem.
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The first stage of testing will utilize Ethereum's Goerli testing network, which was launched as one of the last stages of the highly anticipated Ethereum Shanghai hard fork.
EigenLayer seeks to create a decentralized marketplace where Ethereum node operators and validators can earn fees for providing additional services.
In particular, the protocol allows validators to re-stake assets they have gained from staking Ether on platforms such as Lido (stETH) and RocketPool (rETH). These assets can then be used to validate and secure other networks, including sidechains and non-EVM blockchains.
The EigenLayer white paper also outlines plans to enable re-staking for Ether (ETH) withdrawn from the Beacon Chain after the Shapella upgrade, which will follow Shanghai's hard fork.
Ethereum validators can set their beacon chain withdrawal credentials to the EigenLayer smart contracts, and opt-in to new modules built on EigenLayer.
On top of that, the protocol targets issues related to economic incentives. EigenLayer founder, Sreeram Kannan, emphasized that facilitating the transfer and re-staking of ETH onto other networks would offer additional yields to validators and stakers, fostering the secure expansion of smaller networks.
Ethereum co-founder Joseph Lubin highlighted that the "Eigen Labs team is at the forefront of some of the most exciting work happening in Ethereum.”
In late March, the project successfully raised $50 million in a Series A funding round led by Blockchain Capital, with participation from Coinbase Ventures, Polychain Capital, Electric Capital, and Finality Capital Partner. The funding from the most prominent entities highlights the project's potential.
