Governance Reimagined: Tally Protocol and Symbiotic to Reshape Blockchain Governance Framework
The new protocol Symbiotic, competing with EigenLayer in the re-collateralization market, has amassed over $1 billion in locked value in less than a month. Symbiotic is also exploring some new innovations based on re-collateralization.
New frontier in re-collateralization! Lido co-founder and Paradigm secretly support Symbiotic, the competitor of EigenLayer.
Table of Contents
Governance tokens have become the cornerstone of blockchain ecosystems, allowing holders to actively participate in decision-making processes. However, these tokens often face a dilemma: should they be used for governance or as financial assets? The Tally Protocol combines Symbiotic's shared security framework to provide a solution that maximizes the utility of these tokens without compromising their primary function.
Governance tokens empower holders to influence protocol decisions, but this requires locking the tokens, limiting their financial utility. Token holders must choose between participating in governance or using them as collateral in DeFi applications. This calls for a system that can maximize token utility while retaining governance rights.
Solution by Tally ProtocolThe Tally Protocol addresses this issue by separating governance voting rights from the financial utility of tokens. This allows token holders to:
- Maintain Governance Rights: Continue participating in protocol decisions.
- Use Tokens as Collateral: Protect infrastructure networks without losing governance capabilities.
- Unlock Economic Opportunities: Utilize tokens in new financial realms.
Symbiotic assists the Tally Protocol by providing a shared security framework that supports custom re-collateralization implementations, offering significant benefits to protocols and token holders, including DAO protocol tokens.
Main Advantages- Customizable Security System: Protocols can design tailored security measures.
- Increased Returns: Token holders can earn additional rewards by contributing to network security.
Layer 2 (L2) solutions require decentralized and secure infrastructure. The Tally Protocol and Symbiotic enable L2 to support its services with its own tokens, enhancing network security and decentralization.
Example: Arbitrum Protocol- Staking: ARB token holders stake their tokens in the Tally Protocol to receive tARB (Tally liquid staking Arbitrum token).
- Collateral: These tokens serve as collateral in Symbiotic to support network services like data availability on L3 chains.
- Economic Incentives: ARB token holders earn rewards through staking and can re-collateralize tokens in Symbiotic for additional value from fees paid on the L3 chain.
Interoperability protocols like Wormhole rely on validators and relayers for asset transfers. The Tally Protocol and Symbiotic enhance this setup, especially the Wormhole's native token transfer (NTT) framework.
Example: Wormhole Protocol- Liquidity Staking: Create tW (Tally liquid staking Wormhole token) through the Tally Protocol.
- Enhanced Security: tW holders support decentralized guardians and relayers, collaborating with the guardian network.
- Ecosystem Engagement: Wormhole token holders safeguard their protocol and earn native W staking rewards while supporting service for additional earnings.
By resolving the key limitations of DAO token utility through governance re-collateralization by the Tally Protocol and Symbiotic, new shared security use case categories are unlocked. This approach, by separating governance from financial utility, enables:
- Unlocking New Value: Token holders gain new financial opportunities.
- Preserving Governance Structures: DAOs retain control over their protocols.
- Facilitating Secure Infrastructure Development: Strengthening the blockchain ecosystem.
With the advancement in the blockchain space, this innovative solution could impact the future trajectory of decentralized finance and governance, providing a solid foundation for new applications and enhanced protocol security.