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Newly-Launched Restaking Protocol Symbiotic Reaches $1B in Total Value Locked in Just a Month

Photo for the Article - Newly-Launched Restaking Protocol Symbiotic Reaches $1B in Total Value Locked in Just a Month

The total value locked (TVL) of restaking protocol Symbiotic ‌skyrocketed to over 313,000 $ETH on July 4, 2024, a 240% spike from its 92,000 ETH record, data from DefiLlama shows.

What’s the Significance: The spike in TVL shows that more people are already trusting the platform. [Read more: Restaking Airdrop and Ecosystem Guide: How To Be Eligible]


Photo for the Article - Newly-Launched Restaking Protocol Symbiotic Reaches $1B in Total Value Locked in Just a Month

Driving the News:  

  • Launch Date: Symbiotic was introduced on June 11, 2024.
  • Community Attraction: Only hours after launching, Symbiotic’s TVL has soared above $231 million.
  • Support Funding: Before the launch, the protocol received the backing of investment firms Paradigm and Cyber Fund, which funded the Symbiotic with $5.8 million.
  • Deposit Cap: On July 4, the protocol opened staking on wstETH, where after 4 hours, the 210,600 wstETH cap has been reached. That is around $800 million. 
  • Key Opinion: Symbiotic’s milestone of reaching $1 billion in its smart contract in just 23 days says something, according to an analyst.
  • Effect: Since the launch of Symbiotic, EigenLayer’s total value of assets locked has gone down by about 220,000 $ETH.

The Big Picture

  • In May, online publication CoinDesk revealed that internal company documents they obtained show that the co-founders of liquid staking protocol Lido, along with venture capital firm Paradigm, are secretly helping to fund a restaking protocol. 
  • The plan was said to create the said restaking protocol to compete with EigenLayer, who pioneered the idea of restaking. 
  • EigenLayer is the second largest decentralized finance (DeFi) on the Ethereum Ecosystem next to Lido. They have differences though, Lido is for liquid staking while EigenLayer is for restaking. 
Photo for the Article - Newly-Launched Restaking Protocol Symbiotic Reaches $1B in Total Value Locked in Just a Month

Between the lines: According to Pavel Yashin, a researcher for P2P.org, Symbiotic’s milestone could attract EigenLayer users to switch to the platform they are using for restaking assets.

  • It is because Symbiotic allows deposit funds to support third-party protocols using a shared security model.
  • Users can also restake using Lido’s staked ether (stETH) token and other popular assets that are not natively compatible with EigenLayer.
  • Symbiotic also has a customizable design that allows the combination of tokens as collateral that can be reinvested.
  • Lastly, many users see the potential of the protocol, as it is designed to be “a permissionless restaking protocol that provides flexible mechanisms for decentralized networks to coordinate node operators and providers of economic security.”
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Key Quote: 

Symbiotic can cannibalize the LST (stETH specifically) part of EigenLayer’s TVL.”

Pavel Yashin, P2P.org Researcher

Worth Reading: Learn more about the technicalities of how Symbiotic works here

Partnerships: Though EigenLayer is far more gigantic than Symbiotic in terms of TVL, the latter is now in partnership with big names in the DeFi industry. 

  • On its launch day, the restaking protocol partnered with Lido, which introduced restaking vaults, enabling Lido stETH holders to restake their liquid staking tokens.
  • Moreover, Symbiotic has also partnered with restaking platforms Swell Network, EtherFi, and Renzo, which have a combined TVL of more than $11 billion, 
  • It also inked a collaboration with yield tokenization platform Pendle Finance, with nearly $3.7 billion in TVL.
  • However, it should be noted that Swell Network, EtherFi, Renzo, and Pendle Finance also have partnerships with Eigenlayer.

What to watch: The emerging competition between EigenLayer and Symbiotic on which restaking protocol is better in terms of incentives can push for progress in restaking industry in terms of compatible assets and rewards.

  • Currently, restaking does not provide yield, just points and airdrops. 

Sources: Unchained, Coindesk, BeInCrypto

This article is published on BitPinas: Newly-Launched Restaking Protocol Symbiotic Reaches $1B in Total Value Locked in Just a Month


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