Eigenlayer vs Symbiotic’s rebuilding battle

Author: IGNAS | DEFI Research Source: SUBSTACK Translation: Shan Ouba, Bit Chain Vision

I originally intended to write a blog post on the emerging trend of cryptocurrency this week, but had to quickly turn to the theme of heavy pledges.

The reason is:Eigenlayer’s main competitor Symbiotic has just been launched, with a deposit limit of 200 million US dollars, almost reaching the upper limit in a day.Emerging trends can be waited, but high income opportunities cannot be.

Coupled with Karak, we now have three heavy pledge agreements.So what happened?What is the difference between them?What should you do?

Symbiotic launched the motivation behind

The statement circulating is that Paradigm has contacted Eigenlayer’s co -founder Sreram Kannan to invest, but Kannan chose competitor venture capital company Andreessen Horowitz (A16Z).A16Z led a $ 100 million Series B financing.

From then on,Eigenlayer grew into the second largest DEFI agreement with a total locking value (TVL) of US $ 18.8 billion.second only toLido, locking is worth $ 33.5 billion.The EIGEN tokens have not been transferred. According to FDV (completely diluted valuation), the transaction value is US $ 13.36 billion.Considering that Eigenlayer’s valuation in March 2023 was $ 500 million FDV, which means that the book income increases by 25 times.

It is not difficult to imagine Paradigm dissatisfied with this.In response, Paradigm funded Symbiotic to position it as a direct competitor of Eigenlayer.Symbiotic received $ 5.8 million seed funds from Paradigm and Cyber ​​Fund.

I don’t know what the specific valuation is.If you know, please share in the comments.

The competition between Paradigm and A16Z is well known (also a joke), but this story is still the second part.

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Cyber ​​Fund, the second largest investor in Symbiotic, was founded by the co -founder of Lido, Konstantin Lomashuk and Vasiliy Shapovalov.

CoinDesk reported in May that “people close to Lido believe that Eigenlayer’s heavy pledge method may pose a threat to its dominant position.”

Lido missed liquidity re -pledged token (LRT) trend.In fact, STETH’s TVL has stagnated in the past three months and has dropped by 10%.At the same time, Etherfi and Renzo’s inflows surged, reaching $ 6.2 billion and $ 3 billion, respectively.

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It is more attractive to use LRT for heavy pursuits because it provides higher returns, although most of them are currently farming.

In order to strengthen the status of lido,Lido Dao launched the “LIDO Alliance”, which is the first task of developing a decentralized and re -pledged ecosystem that does not need to be permitted.

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By the way, one of the strategic focus is to re -confirm that STETH as LST instead of LRT.

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This is great because we have more tokens and more airdrop opportunities.

One month after the preliminary discussion, the key member of the league launched the LRT deposit on Symbiotic to support STETH deposits!

But before discussing the unique features and farming opportunities of Mellow LRT, let’s take a step back to discuss the difference between Symbiotic and Eigenlayer.

Symbiotic vs. eigenlayer

Symbiotic: No license and modularization needSymbiotic distinguishes himself by distinguishing yourself without license and modular design, providing more flexibility and control.The key feature is:

• Multi -asset support: Symbiotic allows to deposit directly in any ERC-20 token, including lido’s STETH, CBETH … This makes Symbiotic more diverse than Eigenlayer.Support other assets).

• Custom parameter: Symbiotic networks can choose its mortgage assets, node operators, rewards and cutting mechanisms.This modularity enables the network to adjust its security settings according to its specific needs.

• Unchanged core contract: Symbiotic’s core contract is not upgraded (similar to Uniswap), reducing the risk of governance and potential fault points.Even if the team disappears, Symbiotic can continue to operate.

• No license design: Symbiotic provides a more open and decentralized ecosystem by allowing any decentralized applications without approval.

Symbiotic co -founder and CEO Misha Putiatin told Blockworks, “The “symbiosis” means ‘to avoid competition like fire, and as selflessly as possible, as much as possible’.”

Misha also told BlockWorks, “Symbiotic does not compete with other market participants -therefore, there is no provision of geographical pledge, ROLLUP or data availability.”

When Dapps is launched, it is usually necessary to manage your own security model.However,No license, modularity and flexible Symbiotic design allows anyone to use shared security to protect their networks.

Misha told BlockWorks, “Our project goal is to change the narrative -you don’t have to launch locally -it will be safer and easier to launch above us, and it will be safer and easier to launch.”

In fact, this means that the encryption agreement can launch local pledge for its local token to increase network security.For example, Ethena cooperated with Symbiotic to use the pledged ENA to perform USDE cross -chain security.

Ethena is integrating the decentralized verification network (DVN) framework of Symbiotic and Layerzero to bring Ethena assets protected by pledged ENA (such as USDE cross -chain).This is one of the first parts of the pledged ENA in its infrastructure and system -Symbiotic blog post.

Other cases include cross -chain prophecy machines, retard networks, MEV infrastructure, interoperability, shared sorters, etc.

Symbiotic was launched on June 11, and STETH’s deposit was limited within 24 hours.Oh, do I mention the depositers still have points?

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Eigenlayer: management and integration method

EIGENLAYER adopts a more managed and integrated method. The focus is on the use of the security of the Ethereum ETH pledge to support various DAPPS (AVSS):

• Single asset focus: Eigenlayer mainly supports ETH and its derivatives.Compared with Symbiotic’s multi -asset support, this focus may limit flexibility.Although more assets can be added.

• Centralized management: EIGENLAYER manages the entrusted to node operators for pledged ETH, and then verify various AVS.This concentrated management helps simplify operations, but it may lead to the risk of bundling and make it difficult to accurately evaluate the risk of a single service.

• Dynamic market: EIGENLAYER provides a market for decentralized trust, allowing developers to use ETH security to launch new agreements and applications.Risk sharing between deposits in the pool.

• Cut and govern: Eigenlayer’s management methods include specific governance mechanisms to deal with cutting and rewards, which may provide less flexibility.

To be honest, Eigenlayer is a very complicated agreement. Its risk and overall operation have exceeded my understanding. I have to criticize this part from various sources.One of the sources is Cyber ​​Fund.

I don’t stand by, I believe that the comparison of Symbiotic and Eigenlayer will cause fierce discussions among Defi Period.

Welcome to Mellow Protocol: Modular LRT

What impressed me most impressive Symbiotic was that the LRT on the Mellow protocol immediately launched.As a member of the Lido Alliance, Mellow benefits from Lido’s marketing, integration support, and startup liquidity.

As part of the agreement, Mellow will reward 100 million MLW tokens (10%of the total supply) of LIDO, which will be locked in the legal entities of the Lido Alliance after TGE.

These tokens will follow the same ownership and cliff clauses as the team tokens: the 12 -month cliff period after TGE, and the 30 -month belonging period after the cliff (the editor was modified according to the feedback).

Two other benefits mentioned in the alliance proposal:

• “Mellow will help to spread the decentralized efforts of geographical and technical decentralization of LIDO in other Ethereum verification.”

• “Lido node operator can launch its own combined LRT, and control the risk management process by selecting AVS suitable for its needs, rather than facing the improvement of the LRT or heavy pledge agreement.”

The impact of cooperation will take time, but LDO rose 9%within 24 hours.This is really good!

Interestingly, before the LIDO cooperation was released, the upper limit of the $ 42 million of the four LRT pools had reached.

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In any case, if you are familiar with Eigenlayer’s LRT, such as Etherfi and Renzo, you will know that depositing in Mellow is double fun: you also get the points of Symbiotic and Mellow at the same time.

But Mellow is different from Eigenlayer’s LRT …

What are the problems of LRT?

The Mellow protocol allows anyone to deploy LRT.Hedge funds and pledge service providers (such as lido) can do it.In theory, I can do it.

This means that the number of LRT will increase significantly, which will damage its liquidity and make it complicated in the integration of the DEFI protocol.

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However, it also has some advantages:

• Diversified risk model: The current LRT usually forced users to adopt a risk model suitable for everyone.Mellow allows multiple risk adjustment models, and users can choose their preferences to expose.

• Modular infrastructure: Mellow’s modular design allows shared security networks to request specific assets and allocation.Risk managers can create a highly customized LRT for their needs.

• Smart contract risk: By allowing modular risk management, Mellow reduces the risk of vulnerability in smart contracts and shared security network logic, providing a safer environment for heavy pledges.

• Metropolitanization of operators: Mellow diverse decisions selected by operators to prevent centralization and ensure a balanced and decentralized operator ecosystem.

• LRT cycle risk: Mellow’s design solves the risk of liquidity tightening due to the closure of withdrawal.The current withdrawal takes 24 hours.

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Interestingly, Mellow specifically mentioned that they can start LRT on any pledge protocol, such as Symbiotic, Eigenlayer, Karak or NEKTAR.But I will be surprised by the direct cooperation between Mellow and Eigenlayer.

However, I will not be surprised by the cooperation between the current EIGENLAYER LRT protocol and Symbiotic or Mellow.In fact, CoinDesk reported that a person close to Renzo and Symbiotic mentioned that Renzo had discussed the integration with Symbiotic a month ago.

Finally, a cool feature of the Mellow vault without permission is that we may have the LRT of the Defi token.For example, ENA LRT tokens are ENA pledged on the liquid pledge on Symbiotic to protect the USDE cross -chain bridge.

This round of cycle has almost no innovation in token economics, but Symbiotic may make it attractive to holding the Defi governance tokens.

DEFI Degen’s heavy warriors

As of writing, there are four LRT vaults and four unique curators on Mellow.The upper limit of the deposit is about to reach.

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The timing of Symbiotic + Mellow LRT is perfect: Etherfi S2 points ends on June 30, Renzo S2 is also underway, and Swell airdrops will soon arrive soon after the withdrawal.

I almost worried about how to handle my ETH after the LRT farm airdrop expires.Thanks to the venture capital and giant whale games, the airdrop farmers will also eat well.

At this stage, the game is very simple:Start in Symbiotic to get points, or increase risks by one level, and directly farming on Mellow.

Please note that because Symbiotic’s STETH deposit is full, you will not be able to get Symbiotic points, but you will get 1.5 times the Mellow points.

The airdrop farming game may be similar to Eigenlayer’s script: Mellow LRT will be integrated into DEFI. We will see a leveraged farm on PENDLE and see in multiple borrowing agreements.

But I believe that Symbiotic tokens may be launched before EIGEN trading.

In an interview with BlockWorks, Putiatin said, “The main network may be “the earliest online in the late summer.” Does this mean that the tokens will also be launched?

The popularity of stealing the heavy pledge from Eigenlayer may be a smart move, especially if the market will rise soon and consider the active cooperation strategy of Symbiotic.

The two partners that shocked me: Blockless and Hyperlane.These two protocols initially collaborated with Eigenlayer as a shared AVS, but are they changing the league?

Maybe Symbiotic promised more support and token distribution?I need more answers!

In any case, these heavy -duty wars are beneficial to the airdrop farmers of our decentralized finance (DEFI), because it provides more opportunities and may promote Eigenlayer to launch tokens earlier.

Symbiotic is still in the early stages, but early deposit inflows are very bullish.I am currently farming on Symbiotic and Mellow, but it is planned to migrate to Pendle’s YT when strategy is open.

I believe that PENDLE’s Symbiotic YT tokens will provide us with clues to the Symbiotic TGE timetable.

Last point: karak

Karak is a mixture.It is similar to Eigenlayer, but Karak calls them distributed security services (DSS) instead of AVS.

Karak also launched its own Layer 2 (called K2) for risk management and DSS sandboxes.However, it is more like a test network instead of a real L2.

But Karak managed to attract more than $ 1 billion of TVL!Why?There are two main reasons:

• Karak supports EIGENLAYER’s LRT, so farmers deposit in LRT to earn EIGENLAYER + LRT + Karak points at the same time.

• Karak raised more than $ 48 million from Coinbase Ventures, Pantera Capital, LightSpeed ​​Ventures.Good names are expected to bring high -altitude investment.

However, since the announcement of April, Karak has not yet announced any important partner, a famous LRT protocol or any exclusive DSS/AVS partner launched on Karak.

I really want to see Karak more positive development, because Symbiotic is trying to catch up with Eigenlayer.Karak needs to work harder.