EigenLabs Announces $50 Million in New Funding

Sreeram Kannan, founder and CEO of EigenLabs, is also an associate professor at the University of Washington, Seattle. Courtesy of EigenLabs

EigenLabs, which aims to make Ethereum as fast and flexible as centralized networks of servers like Amazon Web Services, announced on Tuesday a $50 million funding round led by Blockchain Capital.

Sreeram Kannan, founder and CEO of EigenLabs and associate professor at the University of Washington, Seattle, declined to provide the company’s implied valuation. Other investors in the round include Coinbase Ventures, Polychain Capital, Electric Capital, Hack VC and Finality Capital Partners.

“One of the biggest reasons why blockchains aren’t able to support the original vision of, ‘Hey, we’re going to do social networking and Uber and all this crazy stuff,'” [is] because the infrastructure is not ready for it,” Kannan said Fortune.

He believes that the company’s flagship product, EigenLayer, is a potential solution to blockchain’s infrastructure crisis, joining a flood of other infrastructure-focused startups that have secured large amounts of money during the recent crypto bear market.

“By reducing the cost of trust and capital, [EigenLayer] opens opportunities for entrepreneurs to experiment and build, while significantly reducing the financial barriers that have hindered innovation in the past,” Bart Stephens, founder and managing partner of Blockchain Capital, said in a statement.

Unlike startup founders who immediately jumped from dorm to boardroom, Kannan comes from academia. During his master’s and doctoral studies, he researched wireless peer-to-peer networks and soon became interested in blockchain technology. Landing at the Seattle campus of the University of Washington, he eventually took a leave of absence to launch his own startup. And in 2021 he founded EigenLabs.

Kannan saw that the performance of Ethereum, a cloud computing network that is decentralized—or not owned by one technology conglomerate—weakened compared to the centralized server networks operated by Amazon and Google.

Specifically, when developers on Ethereum run their code on the blockchain, they don’t have the choice of which servers or Ethereum nodes run their programs. This creates redundancy, as many servers process the same code.

Developers building on top of EigenLayer, Kannan says, will be able to choose which nodes run which parts of an application’s code. This capability allows programmers to create a division of computing work, a feature long ago available to developers using AWS, for example.

To demonstrate the utility of EigenLayer, he and his team are building a “data availability layer” on top of their product, or a faster way to write data on Ethereum’s blockchain, whose data-writing capabilities, Kannan says, are currently reminiscent of computers from the 1990s.

But this is just one promise for EigenLayer, which Kannan now hopes to build out as he adds staff, funds code revisions and supports developers who want to build with his product.

“Our focus,” he said Fortune, “will be solely on maximizing the surface of innovation, which is: What new things can you build? That’s going to bring in the next group of application builders, who then bring in the next group of users.”