Lido co-founder and Paradigm secretly back EigenLayer rival Symbiotic

EigenLayer can currently be said to be the sole overlord of the “re-pledge” protocol, absorbing a large amount of the pledge certificate stETH from the Ethereum pledge protocol Lido. However, Lido has revealed that its key figures behind the scenes, along with venture capital firm Paradigm, have now secretly funded an emerging company, Symbiotic, which aims to become a direct competitor to EigenLayer.

Staking and re-staking

Over the past few years, Lido has become a superstar in the DeFi space, launching a protocol that allows users to stake cryptocurrencies on Ethereum. At the same time, obtain tradable "stETH" tokens. However, with the emergence of EigenLayer, which lets users re-stake Ethereum’s ETH tokens to secure other networks, it quickly expanded to become a powerful force in the DeFi space, and Lido faced a decline in market share.

The birth of a new competitor, Symbiotic: full asset re-hypothecation?

The emergence of Symbiotic symbolizes the beginning of a new round of competition. According to internal documents and sources, Symbiotic will provide a way for decentralized applications, or "Active Verification Services" (AVS), to work together to ensure each other's security. Users will be able to re-stake their deposits in other crypto protocols to help secure these AVS in exchange for rewards. One of the great features of Symbiotic is that it will let users directly deposit any asset based on the Ethereum ERC-20 standard, in contrast to EigenLayer which only accepts ETH tokens.

The influence of Lido funds

Lido’s co-founders, through their venture capital company Cyber ​​Fund, and Paradigm, not only provide financial support, but also strategically support EigenLayer threatening. Lido, which has maintained its leading position in the field of decentralized finance, must now consider how to use re-staking strategies to maintain its market dominance.

Future Outlook of the DeFi Market

In this fierce competition, Lido DAO proposed the concept of the "Lido Alliance", aiming to place stETH at the center of the re-hypothecation trend. Additionally, Symbiotic's protocol design reflects a more permissive approach to collaboration, which could make it a strong contender for license-based protocols. With Symbiotic expected to launch before the end of this year, the industry will pay close attention to its potential impact on the DeFi environment.

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