The Evolving Restaking Landscape
Symbiotic introduces new innovative features
Based on IntoTheBlock’s weekly newsletter. If you enjoy it, and would like to receive it every Friday make sure to sign up here!
This week, we explore the evolving dynamics in the restaking sector, as emerging platforms like Symbiotic introduce innovative features that challenge established entities such as EigenLayer. We assess the impact of these new entrants on the strategic alignments and technological advancements within the sector, analyzing how these changes affect both individual stakers and the broader blockchain ecosystem.
Network Fees — Sum of total fees spent to use a particular blockchain. This tracks the willingness to spend and demand to use Bitcoin or Ether
- Bitcoin fees have once again surpassed Ethereum fees over the course of the year, primarily driven by increased demand within the Runes ecosystem.
Exchanges Netflows — The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges
- $1.05 billion worth of BTC was withdrawn from exchanges this week.
The Evolving Restaking Landscape
The Symbiotic restaking project was launched on Tuesday, concurrently announcing a funding round of $5.8 million secured from Paradigm and cyber.Fund. The launch of the project coincides with the initiation of Symbiotic’s bootstrapping phase and the integration of restaked collateral. Similar to EigenLayer, Symbiotic aims to tackle prevalent challenges in blockchain development and network security by reallocating existing staking capital and infrastructure. The introduction of restaking by EigenLayer has seen substantial growth and adoption throughout the year. Emerging protocols like Karak and Symbiotic are now entering the field, further evolving the concept.
$20 billion in Total Value Locked (TVL) — The adoption of EigenLayer has been substantial, reaching an all-time high in TVL on June 6.
- Symbiotic’s major differentiator from EigenLayer lies in its allowance for the use of various ERC-20 tokens, not just limited to ETH and specific derivatives.
- This more open restaking model follows the one applied by Karak, another restaking protocol that adopts a similar approach.
The highest it’s ever been — 48% of all Liquid Staking Tokens (LST) minted are currently being restaked in the Eigenlayer protocol.
- EigenLayer accepts deposits of Lido’s stETH, enabling simultaneous use of Lido and EigenLayer. However, it has implemented caps on the amount of stETH that can be deposited.
- The growth of EigenLayer has affected Lido, the leading liquid staking token provider on Ethereum, as some users have withdrawn their LST from Lido to reallocate their assets into the higher-yield restaking platform.
- This underscores the migration of users towards the restaking protocol, moving away from what were once central stage LST protocols.
The new normal — The market for EigenLayer’s LRTs has seen massive adoption by users.
- Mellow, the first liquid restaking platform for Symbiotic, was launched concurrently with Symbiotic.
- Lido has endorsed the Mellow protocol as a partner, which may lead to a migration of some wstETH deposits from EigenLayer to Symbiotic.
- Additionally, both Mellow and Symbiotic are currently in the points distribution phase and have yet to launch their tokens. Consequently, some migration of airdrop farmers could also be expected.
- Furthermore, we might soon observe established LRT protocols such as Etherfi or Renzo beginning to integrate with the emerging Symbiotic platform.
The landscape of liquid restaking protocols is rapidly evolving, with new entrants like Symbiotic introducing versatile features that challenge established players such as EigenLayer. As these platforms compete for dominance, strategic partnerships and innovations are likely to influence the future of the sector. This highlights a dynamic shift towards a more competitive and varied restaking landscape.
