As a professional translator, I would translate the news article as follows:
Blockchain media outlet CoinWorld reported:
Author: Macauley Peterson
Source: blockworks
Translation: Shanooba
EigenLayer, a pioneer in the re-staking field, has demonstrated significant success in attracting capital and has become a “black hole” in the Ethereum space, becoming one of the largest DeFi protocols in the process. However, Symbiotic, with its “staking any asset” design, enters the shared security space and may bring disruptive changes.
Since its launch on the Ethereum mainnet over a year ago, EigenLayer has absorbed approximately 5.4 million ETH, reaching a peak value of $20 billion in early June.
The protocol actively increased the deposit limit in early 2024 and accepted more types of Ethereum. By March, deposits had increased from less than 1 million ETH to about 3 million. This growth rate continued after the launch of Karak, a multi-asset re-staking model designed to increase staking rewards.
Symbiotic further deepens this concept by supporting any ERC-20 asset as collateral for re-staking. This customized option and flexible re-staking model allow developers to protect their applications using various assets. Yesterday, the re-staking versions of Ethena’s native token ENA and its synthetic dollar sUSDe became the first non-ETH assets to be re-staked on Symbiotic. sUSDe earns income through Ethereum staking and futures basis trading.
The new sUSDe insurance vault on Mellow Finance, Symbiotic’s risk management platform, quickly reached a cap of $40 million, while the ENA insurance vault was filled halfway after the first day of deposits. Both Mellow and Symbiotic are supported by Cyber Fund and are part of the Lido Alliance, with other Mellow insurance vaults only accepting Ethereum staked with Lido (stETH).
The Ethena insurance vault has three managers: MEV Capital, Re7 Labs, and K3. Laurent Bourquin, General Partner at MEV Capital, expects Liquid Re-staking Tokens (LRTs) to be accepted as deposits in Symbiotic insurance vaults.
The main difference of Symbiotic lies in its “indiscriminateness,” allowing EigenLayer’s LRTs to enter Symbiotic. This will result in double slashing and double rewards.
Other liquid staking and re-staking providers are also eager to enter this field. Sunand Raghupathi, Co-founder of Veda Protocol and Seven Seas Capital, stated that two days after the launch of Symbiotic, they were able to launch an LRT on Symbiotic through Veda.
Veda has partnered with EtherFi to launch the “Super Symbiotic” insurance vault, which accepts various Ethereum derivatives, including EtherFi’s eETH, and converts them to stETH for Symbiotic use. Technically, Symbiotic can accept eETH itself, which would result in double staking – first on EigenLayer and then on Symbiotic – but this is not the practice of EtherFi. If a user provides eETH, it is first removed from EigenLayer. Misha Putiatin, Co-founder of Symbiotic, pointed out that double staking is inherently risky. We cannot prevent people from double staking, but we have no plans to incentivize this behavior.
Bourquin of MEV Capital believes that double staking is inevitable. Currently, this risk is temporarily set aside due to the absence of slashing mechanisms on EigenLayer. Deposits received by EigenLayer can be delegated to Active Validation Services (AVS), but currently, none of them have enabled slashing conditions, which will ultimately expose depositors to greater risks. Bourquin sees the flexibility of Symbiotic as a clear advantage.
EtherFi initially started as an EigenLayer re-staking protocol but later became a trusted brand in other areas as well, such as launching Liquid, a stablecoin insurance vault managed by Seven Seas, which earns high returns through various DeFi channels like liquidity provision, lending optimization, and price arbitrage. By allowing its users to participate in Symbiotic, EtherFi can retain these users within its ecosystem and capture some capital flow. This approach provides an alternative to converting eETH through on-chain liquidity pools, which could put pressure on the stability of derivatives.
Even with a reduced quantity of eETH, EtherFi can still retain these users through its brand and front-end.
EigenLayer believes that most assets should not be used for this purpose, and it took a long time to discover that ETH is the king of secure assets in a sense. Symbiotic believes that market forces should determine what assets are suitable for AVS staking collateral. EigenLayer does have plans to support double staking using ETH and a custom cryptographic asset, but Symbiotic’s permissionless design allows for this today.
Anyone can create a market on Symbiotic, so the types of tokens used to secure AVS on Symbiotic will be much more diverse than EigenLayer, which focuses heavily on ETH.
