![The Second Restaking Unicorn: EigenLayer’s Competitor Symbiotic Reaches $1 Billion in TVL](/content/images/size/w1200/2024/07/Symbiotic.webp)
In less than a month, Symbiotic achieved a huge milestone by amassing $1 billion in total value locked (TVL). With the backing of Lido, the largest DeFi protocol in the crypto, Symbiotic has quickly positioned itself as a formidable competitor to the restaking protocol EigenLayer.
Like EigenLayer, Symbiotic offers restaking services, but with a distinctive advantage – it accepts any asset based on Ethereum's ERC-20 token standard. This includes not only Lido’s staked ETH (stETH) token but also a myriad of other ERC-20 tokens, whereas Eigenlayer focuses only on ETH and ETH synthetic tokens.
Leveraging support from Lido, Symbiotic quickly secured valuable partnerships and integrations within the industry, including noteworthy projects such as Ethena and LayerZero. Through these partnerships, the project introduced restaking for ENA, Ethena’s native token, and sUSDe— Ethena’s version of the synthetic dollar that earns yield through Ethereum staking and futures basis trade. These tokens are among the first non-ETH-based assets to be restaked on Symbiotic.
Adopting a similar go-to-market strategy as EigenLayer, Symbiotic rewards its stakers with points that will be converted into tokens. This strategy has been particularly successful this cycle, attracting numerous airdrop hunters eager to deposit their assets in exchange for potential rewards.
Despite the enthusiasm, the Symbiotic team has cautiously controlled the growth of their product to ensure thorough testing and maintenance of their systems. They have implemented caps on the amount that can be staked, leading to situations where nearly all Symbiotic ETH vaults are at full capacity. Users must now wait for an increase in these caps to stake more. Without such restrictions, Symbiotic's TVL could have been even higher.
The rising competition has also impacted EigenLayer, whose TVL has declined from its peak of 5.41 million ETH in mid-June by approximately 10% to 4.86 million ETH. Many of these users likely transitioned to Symbiotic, drawn by the prospect of acquiring the new token.
Although restaking has attracted significant supply-side interest, with billions flowing into the sector, the demand-side market for restaking services remains tepid, with growth progressing slower than some may have anticipated. Industry experts, such as Kyle Samani, Co-Founder of Multicoin Capital, expressed skepticism, suggesting that restaking “is not solving any problem.”
However, despite the doubts, the narrative around restaking continues to attract many believers. As is often the case with new technologies, only time will reveal its long-term viability. We will continue monitoring and reporting on this evolving sector's developments.