Lido, rapidly becoming the largest DeFi project since its launch, now faces new competition.
Symbiotic, a company poised to enter the fast-growing restaking market, aims to challenge Lido’s dominance.
Lido Faces New Challenger in DeFi Space
Sources told CoinDesk that Symbiotic has gained support from Lido’s co-founders, Konstantin Lomashuk and Vasiliy Shapovalov. They have invested through their venture fund, Cyber Fund. Additionally, Paradigm, a prominent crypto venture capital firm and one of Lido’s main investors is also backing the new venture.
The term “restaking” refers to a process where users can leverage their staked assets, such as Lido’s staked ether (stETH) token. This allows them to participate in further staking activities across different protocols, thereby maximizing their potential yield. Unlike direct staking, restaking allows for increased flexibility and efficiency in managing staked assets.
SCOOP: Lido's co-founders and @Paradigm secretly funded a restaking startup that will compete with @EigenLayer.@skesslr reportshttps://t.co/7BENBrdkhW
— CoinDesk (@CoinDesk) May 14, 2024
According to leaked internal documents obtained by CoinDesk, Symbiotic aims to become a “permissionless restaking protocol” that facilitates decentralized networks in coordinating node operators and providers of economic security. The protocol will target assets that are not natively compatible with EigenLayer, thereby broadening its usability and appeal. The initiative represents a strategic move to capture a niche market within the broader staking ecosystem, which continues to attract significant capital and interest in the DeFi sector.
The inception of Symbiotic is especially noteworthy given the involvement of high-profile figures from Lido and Paradigm. This suggests not only a strategic alignment within these organizations but also hints at the evolving strategies of DeFi leaders. They are navigating the complex and competitive landscape of blockchain technologies.
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