According to Bloomberg, venture capitalists are increasingly investing in cryptocurrency startups led by academics. Companies such as Sahara, CheckSig, and NEBRA, all founded by professors, have recently raised fresh capital. Two startups, in particular, have gained attention in a category the industry has dubbed 'professor coins.' EigenLayer, founded by Sreeram Kannan, a former associate professor at the University of Washington, is one of these.
Riad Wahby, an engineering professor at Carnegie Mellon University and CEO of crypto startup Cubist, stated that much of the technology being used to generate yield in the current crypto cycle is emerging from research by academics like Kannan. Kannan's work on 'restaking' technologies, a concept that allows new projects to borrow Ethereum's staking power to validate transactions on the blockchain, has been particularly influential.
Another startup, Babylon, is adopting a similar approach but focusing on Bitcoin, which uses a different mechanism, proof of work, to validate transactions. If successful, Babylon's platform will also address a long-standing issue for Bitcoin holders: the lack of yield generation.
However, the journey is not always smooth for these academic-led crypto projects. Despite attracting more than $15 billion in crypto assets to its platform, EigenLayer faced criticism for a misunderstanding of the broader digital asset market. In April, the company released a launch plan for its Eigen currency, despite Kannan stating in February that there were no plans for a token. The decision to make the tokens non-transferable at launch also frustrated some early users who invested large amounts of capital on EigenLayer.
The Eigen Foundation, responsible for the token, said in a blog post that by making the coins non-transferable, it can have more time to improve the project's decentralization and enhance key features associated with the token. Despite the criticism, the industry's focus on these academic-led projects indicates a growing interest in the intersection of academia and cryptocurrency.