The EigenLayer protocol has gained popularity for being the first to re-stake Ethereum tokens. However, the protocol recently decided to exclude users from the United States and Canada from participating in the upcoming EIGEN token airdrop, drawing attention to other staking protocols such as Karak and Symbiotic.
Yet, what sets Symbiotic and Karak apart from EigenLayer?
In this guide, we will delve into the emerging proof-of-stake protocols Symbiotic and Karak, their differences from the EigenLayer protocol, and their distinctions from each other.
What is re-staking?
Re-staking involves further staking pledged assets or fluid staked assets to secure other networks or applications.
The concept aims to repurpose idle assets to cover the startup costs of new protocols and incentivize re-stakers through re-staking rewards.
What is EigenLayer? What role does it play in the Ethereum re-staking ecosystem?
EigenLayer facilitates re-staking of already staked ETH and allows stakers to earn additional re-staking rewards for their contributions.
The protocol leverages re-staking to extend Ethereum’s trust infrastructure to new protocols lacking adequate resources to incentivize new validators.
That being said, EigenLayer currently focuses on re-staking ETH assets and Lido’s liquid staking tokens (LST), with plans to expand the network’s coverage in the future.
This initial scope has created opportunities for its two emerging competitors, Symbiotic and Karak.
What is Symbiotic?
Symbiotic is a new contender in the re-staking arena where validators can re-stake their assets through this permissionless protocol to achieve shared security.
Symbiotic utilizes a modular design, supporting the re-staking of various ERC-20 tokens (including stETH) and granting developers full control over the entire re-staking process. The protocol’s minimal coordination layer can be plugged into existing or new protocols. Additionally, its flexible re-staking logic enables developers to choose their preferred collateral assets, validator nodes, rewards, and slashing mechanisms.
Key features of Symbiotic
The key components of the Symbiotic protocol include:
Multi-asset collateral: Symbiotic supports re-staking from various networks, including ERC-20 compatible assets, LP tokens, and other digital assets.
Vaults: These are custom contracts used to handle collateral delegation across networks.
Operators: Entities managing infrastructure on behalf of the network.
Resolver: A multi-functional contract responsible for approving or rejecting slashing penalties generated by operators on the network they serve.
Network: These protocols require a group of validators to offer trusted minimized services.
Symbiotic’s pros and cons
Advantages:
Offers developers flexibility to customize re-staking protocols according to their needs: The network manages re-staking implementation, allowing re-stakers to opt in or out of shared security contracts.
Provides security at an affordable cost: By utilizing a variety of assets for collateral, Symbiotic delivers high-quality security, making sharing the security costs of new blockchain networks not only affordable but also eliminates the complexity of building security protocols from scratch.
Enhances capital efficiency: Symbiotic’s permissionless network provides cryptocurrency re-holders with a scalable way to fund the startup costs of new projects.
Disadvantages:
Collateral limits: The number of collateral assets at launch is restricted and only supports collateral assets from major protocols.
What is Karak?
Karak is another newcomer in the re-staking arena that distinguishes itself from EigenLayer and Symbiotic by offering a more