Lido now supports earning rewards! Collaborating with Mellow Finance and Symbiotic to compete in the stETH re-staking market.

Lido announced a new partnership with Mellow Finance, one of the founding members of the Lido Alliance, on 6/11 to provide advanced DeFi vaults for stETH holders, including a re-staking strategy developed in collaboration with Symbiotic. This update is expected to enhance the utility and liquidity of staked ETH while offering new re-staking opportunities for Ethereum stakers. Lido's move comes in the wake of the re-staking trend initiated by EigenLayer, with the native creation of re-staking services.

In Lido's framework, Symbiotic is analogous to the re-staking protocol EigenLayer, while Mellow Finance belongs to the liquidity re-staking protocol LRT.

New frontiers in re-staking! Lido's co-founder and secret supporter of EigenLayer's competitor Symbiotic, Paradigm

Unlocking New Potential for stETH with Mellow Finance

Advanced DeFi Strategies for Ethereum Stakers

Lido's strategy to support Ethereum and LST-related projects includes a collaboration with Mellow Finance, bringing more value and opportunities to the staking community. The Lido Alliance will facilitate collaboration and strengthen stETH's position as a preferred collateral in the market, particularly in the re-staking aspect, providing value to stETH holders.

Through partnerships with Mellow Finance, Symbiotic, and several orchestrators including Steakhouse, P2P, Re7 Labs, and MEV Capital, Lido has designed a new treasury to enable stETH holders to participate in decentralized re-staking, creating more opportunities.

Benefits for stETH Holders

• Re-stake stETH: Maximize the utility of stETH by utilizing it for additional DeFi opportunities.
• Receive Mellow Treasury LRT: Earn LRT rewards from the Mellow Treasury.
• Continue earning staking rewards: Maintain staking rewards for held stETH.
• Benefit from treasury strategies: Gain additional staking rewards based on treasury orchestrators' strategies, yet to be launched.
• Accumulate Mellow and Symbiotic points

Four New Treasuries by Mellow Finance

• Steakhouse Financial: stETH APR + Symbiotic points + Mellow points + re-staking APR
• P2P Validator: stETH APR + Symbiotic points + Mellow points + re-staking APR
• MEV Capital: stETH APR + Symbiotic points + Mellow points + re-staking APR
• Re7 Labs: stETH APR + Symbiotic points + Mellow points + re-staking APR

Playing the Re-staking Points Game with Lido

Mellow Finance can create permissionless liquid re-staking tokens LRT based on individual risk preferences and orchestrator models. Lido will integrate introductions and links to Mellow deposits on its homepage, ensuring ongoing liquidity through the new stETH LRT points program.

Traditional LRTs typically limit users to a single method. Mellow Finance allows users to create customizable LRTs, enabling orchestrators to design strategies that best suit various preferences and goals.

Security is Key

Lido states that these treasuries have undergone thorough testing, comprehensive audits, and continuous monitoring.

Researcher Comments: Self-Destruction Improbable

Cupid, a researcher at Sudo Research, stated that in short, a combination of Lido + EigenLayer or Symbiotic self-destruction is unlikely. Symbiotic competes with EigenLayer and locks in services similar to AVS. stETH now has two final destinations: EigenLayer or Symbiotic, with the existing LRT protocol allowing for choice.

Symbiotic has future interest rate advantages, as additional opportunities to play Paradigm's unique sandwich attack technology to push rates higher. However, the Reth node for the sandwich attack technology is still in development, with future support for Hook to complete MEV. Furthermore, stETH can be hosted by different individuals and deposited into Symbiotic, similar to the re-staking tokens on Mellow Finance.

Cupid mentioned that the re-staking ecosystem previously only had EigenLayer as the dominant protocol, and now with the collaboration with Symbiotic, Lido may attract more native users to enter the re-staking scene. Why is self-destruction improbable? If everyone enters the re-staking ecosystem and it explodes, then it's a complete collapse, so Lido will strive to maintain re-staking.