Pledging New Frontiers Again! Lido Co-founder and Paradigm Secretly Back EigenLayer's Competitor Symbiotic

EigenLayer is currently the dominant player in the "re-staking" protocol, having absorbed a large amount of staked stETH tokens from the Ethereum staking protocol Lido. However, reports have emerged that key figures behind Lido have secretly backed a new company called Symbiotic, with investment firm Paradigm, aiming to become a direct competitor to EigenLayer.

Staking and Re-Staking

In recent years, Lido has emerged as a superstar in the DeFi space, introducing a protocol that allows users to stake cryptocurrencies on Ethereum and receive tradable "stETH" tokens while staking. However, with the emergence of EigenLayer, which enables users to re-stake Ethereum's ETH tokens to secure other networks, it has rapidly expanded and become a powerful force in the DeFi space, challenging Lido's market share.

The Rise of New Competitor Symbiotic: Full Asset Re-Staking?

The emergence of Symbiotic marks the beginning of a new round of competition. According to internal documents and sources, Symbiotic will offer a method called Active Verification Services (AVS) that allows decentralized applications to jointly ensure each other's security. Users will be able to re-stake their deposits in other crypto protocols to help secure these AVS and earn rewards in return. One notable feature of Symbiotic is that it allows users to directly deposit any assets based on the Ethereum ERC-20 standard, in contrast to EigenLayer, which only accepts ETH tokens.

The Influence of Lido's Funding

Lido's co-founders, through their venture capital firm Cyber Fund and in partnership with Paradigm, not only provide financial support but also pose a strategic threat to EigenLayer. To maintain its leading position in the decentralized finance sector, Lido now needs to consider how to leverage re-staking strategies to sustain its market dominance.

The Future Outlook of the DeFi Market

In the midst of this intense competition, Lido DAO has proposed the concept of the "Lido Alliance," aiming to place stETH at the center of the re-staking trend. Furthermore, Symbiotic's protocol design reflects a more collaborative approach, which could make it a strong competitor for permission-based protocols. With Symbiotic expected to launch by the end of this year, the industry will closely monitor its potential impact on the DeFi landscape.