Introducing Symbiotic - The latest restaking protocol in town

Restaking Summer has arrived.

The staking revolution on Ethereum and other proof-of-stake blockchains has been one of the biggest developments in crypto over the past few years. First came staking pools and services that allowed users to earn rewards by contributing their crypto assets to help secure these networks. Then liquid staking derivatives like stETH unlocked composability and liquidity - holders could put their staked assets to work earning yield in DeFi while still earning staking rewards.

The first half of 2024 has seen the rise of restaking - protocols that allow staked assets like stETH, wETH, osETH and more to be recursively staked to earn compounding rewards. EigenLayer took restaking mainstream, locking nearly $20B in TVL (at the time of writing) as users flocked to maximize their yields. But restaking has been limited to a single asset like ETH so far.

‍

Enter Symbiotic

Now, a new protocol called Symbiotic is aiming to push restaking into its next phase - a permissionless, asset-agnostic restaking layer for all of crypto.

Symbiotic is a generalized shared security protocol that serves as a thin coordination layer. It empowers network builders to source operators and scale economic security for their decentralized network.

At its core, Symbiotic separates the concepts of staking capital ("collateral") and validator infrastructure. This allows networks to tap into pools of staked assets as economic bandwidth, while giving stakeholders full flexibility in delegating to the operators of their choice.

The Symbiotic protocol has a modular design with five core components that work together to provide a flexible and efficient ecosystem for decentralized networks.

1. Collateral: ERC-20 tokens representing staked assets or liquidity positions from various blockchains, enabling cross-chain capital efficiency.
2. Vaults: A key component handling delegation and restaking management, responsible for accounting, delegation strategies, and reward distribution. Vaults can be configured in various ways to create differentiated products.
3. Operators: Entities like Chorus One that run infrastructure for decentralized networks within and outside the Symbiotic ecosystem. The protocol creates an operator registry and enables them to opt-in to networks and receive economic backing from restakers through vaults.
4. Resolvers: Contracts or entities that handle slashing incidents forwarded from networks, with the ability to veto these incidents. Resolvers can take the form of committees or decentralized dispute resolution frameworks, providing added security to participants.
5. Networks: Protocols that rely on decentralized infrastructure to deliver services in the crypto economy. Symbiotic's modular design allows developers to define engagement rules for participants in multi-subnetwork protocols.

‍

Understanding how the protocol works

‍

1. Users can deposit their assets and mint Collateral into trusted Vaults (e.g., a Chorus One-specific vault). These Vaults predefine the eligible collateral, such as ETH, stablecoins, LP positions, etc.
   
   
2. Vaults then manage the delegation of assets to operators or opt-in to run the infrastructure of chosen Networks (in the case of operator-specific Vaults like the Chorus One Vault). For Vaults that are not operator-specific, Symbiotic offers a registry of operators with their credentials to facilitate restakers’ delegation strategies.
   
   
3. While Vaults define acceptable collateral, Networks need to accept this collateral. Additionally, Vaults and Networks must agree on the slashing and reward distribution logic.

‍

What makes Symbiotic unique?

Symbiotic leverages a flexible model with specific characteristics that offer distinct advantages to each stakeholder:

For Operators:

• Operators can secure stakes from a diverse range of restakers with varying risk tolerances without needing to establish separate infrastructures for each one.

For Restakers:

• Restakers can delegate assets beyond ETH and select trusted Vaults for their deposits. They also have the option to place their collateral in immutable Vaults, ensuring that the terms cannot be altered in the future.

For Networks:

• Networks can collaborate with top-tier operators who have verified credentials. When sourcing security, networks can choose operators based on reputation or other important criteria. The flexibility in collateral options leads to a more extensive security pool, potentially reducing security costs for networks.

The protocol opened for deposits on June 11th, and it was met with much fanfare and demand: within a mere 5 hours of going live, a whopping 41,000 staked wETH had already been deposited into the protocol - smashing through the initial cap! New crypto assets and higher caps will be added as the protocol onboards more networks and operators.

Symbiotic vs. EigenLayer

Symbiotic sets itself apart with a permissionless and modular framework, providing enhanced flexibility and control. Key features include:

1. Multi-asset support: Symbiotic permits direct deposits of any ERC-20 token, enhancing its versatility compared to EigenLayer, which is primarily centered around ETH and its derivatives. Nonetheless, EigenLayer has indicated the potential to support any asset in the future.
2. Customizable Parameters: Networks utilizing Symbiotic can select their collateral assets, node operators, rewards, and slashing conditions. This modularity grants networks the freedom to tailor their security settings to meet specific needs.
3. Immutable Core Contracts: Symbiotic’s core contracts are non-upgradeable, which minimizes governance risks and potential points of failure.
4. Permissionless Design: Symbiotic fosters a more decentralized and open ecosystem by enabling any decentralized application to integrate without needing prior approval.

‍

EigenLayer employs a more managed and centralized strategy, concentrating on utilizing the security provided by ETH stakers to back various decentralized applications (AVSs):

1. Single Asset Focus: EigenLayer primarily supports ETH and its derivatives. This focus can limit flexibility compared to Symbiotic’s broader multi-asset support.
2. Centralized Oversight: EigenLayer oversees the delegation of staked ETH to node operators responsible for validating different AVSs.
3. Dynamic Marketplace: EigenLayer offers a marketplace for decentralized trust, enabling developers to leverage pooled ETH security to launch new protocols and applications, with risks being distributed among pool depositors.

‍

Symbiotic x Mellow Protocol

Symbiotic has collaborated extensively with Mellow Protocol, its "native flagship" liquid restaking solution. This partnership empowers node operators and other curators to create their own composable LRTs, allowing them to manage risks by choosing networks that align with their specific requirements, rather than having these decisions imposed by restaking protocols.

Mellow provides the ability for anyone, including hedge funds and node operators, to deploy a Liquid Restaking Token. This will likely lead to a significant increase in the number of LRTs, complicating their integration with DeFi protocols and affecting liquidity. Despite these challenges, Mellow offers several advantages:

• Varied Risk Profiles: Traditional LRTs often impose a single risk profile on all users. Mellow enables multiple risk-adjusted models, allowing users to select their desired level of risk exposure.
• Modular Infrastructure: Mellow's modular design permits networks to request specific assets and configurations, enabling risk curators to create tailored LRTs to meet their needs.
• Smart Contract Risk: By allowing modular risk management, Mellow reduces the risk of bugs in smart contracts and logic of Shared Security Networks, providing a safer environment for restakers.
• Operator Centralization: Mellow prevents centralization by distributing the decision-making process for operator selection, ensuring a balanced and decentralized operator ecosystem. Existing LTRs determine which operators should validate their pooled ETH, as well as what AVS they opt in to, effectively managing Risk on behalf of users.
• LRT Looping Risk: Mellow addresses the risk of liquidity issues caused by withdrawal closures, with current withdrawals taking 24 hours.

‍

Symbiotic restaking is LIVE on our staking dApp, OPUS Pool

We’re proud to share that we have integrated Symbiotic restaking into our staking dApp, OPUS Pool.  

​​OPUS users can now seamlessly tap into Symbiotic's restaking capabilities with just a few clicks on our dApp. When the cap is relifted, simply deposit your assets to start earning Symbiotic points, which can soon be delegated to operators like Chorus One to earn rewards.

Not only is the process incredibly user-friendly, but it's fully secure and censorship-resistant - restaking as it was meant to be.

Start restaking today at: https://opus.chorus.one/pool/restake

‍

Resources:

Symbiotic Website: https://symbiotic.fi/

Docs: https://docs.symbiotic.fi/

Twitter:https://x.com/symbioticfi

‍

About Chorus One

Chorus One is one of the biggest institutional staking providers globally, operating infrastructure for 50+ Proof-of-Stake networks, including Ethereum, Cosmos, Solana, Avalanche, and Near, amongst others. Since 2018, we have been at the forefront of the PoS industry and now offer easy enterprise-grade staking solutions, industry-leading research, and also invest in some of the most cutting-edge protocols through Chorus Ventures. We are a team of over 50 passionate individuals spread throughout the globe who believe in the transformative power of blockchain technology.