Ethereum, Bitcoin, and Solana ecosystem re-staking protocol financing is booming. Which protocols can be profitable?

Author: Grapefruit, ChainCatcher

Editor: Marco, ChainCatcher

In April, ChainCatcher summarized the restaking protocols on Ethereum and the LRT protocol in the article "Frequent Capital Injection, Project Airdrops, Restaking LRT Track Becomes a 'New Gold Rush'", which includes EigenLayer and its LRT-based protocols such as Renzo, Ether.fi, Kelp DAO, EigenPie, YieldNest, Swell, Pendle Finance, etc.

Although the issuance of tokens by Renzo and the airdrop of EigenLayer are expected to materialize, the market enthusiasm for the restaking track has remained high over the past three months. The "points war + multiple benefits" continues to be fervent in the crypto community, with large-scale financing in the tens of millions occurring frequently.

On June 18, Renzo announced the completion of a $17 million financing round led by Galaxy Ventures; on June 11, the restaking project Symbiotic announced the completion of a $5.8 million seed round financing, led by Paradigm and Cyber Fund.

Data shows that 16.3% of all staked ETH is participating in restaking through Eigenlayer, Karak_Network, and others.

Perhaps seeing the wealth opportunities in restaking, the narrative around restaking has recently spilled over from its main base in Ethereum to ecosystems like Bitcoin and Solana.

It is reported that at least six teams in the Solana ecosystem are building Solana restaking projects.

Recently, there have been two financing rounds exceeding ten million in the Bitcoin ecosystem. On May 30, Babylon completed a $70 million financing round led by Paradigm; on July 2, the Bitcoin restaking protocol Lombard completed a $16 million seed round financing, led by Polychain Capital.

Three Major Restaking Protocols on Ethereum: EigenLayer, Symbiotic, Karak Network

• EigenLayer's Airdropped Tokens Non-Transferable, Highly Controversial

As the pioneer of the restaking concept, EigenLayer has always been a leading project in the restaking track. However, since EigenLayer announced its EIGEN token economic model on April 30 and stated that airdropped tokens would be non-transferable, it has sparked a series of public opinion controversies.

The most criticized point by users is that EigenLayer stated in its white paper that the transfer rights of EIGEN tokens are restricted in the initial phase, and it does not support users transferring or trading them. This means that users cannot buy or sell EIGEN tokens on the secondary market.

The official explanation given is due to a lack of liquidity, but from the users' perspective, this is undoubtedly seen as the project team being unreasonable. The recently launched stablecoin project Ethena, which just completed its airdrop, sarcastically posted on social media, "Tokens are transferable, we love you."

In addition to the non-transferability of tokens, EigenLayer also restricted users' IP addresses during the airdrop, further aggravating user dissatisfaction, as EigenLayer did not impose IP restrictions on the early staking deposit page, only announcing the restrictions at the time of the airdrop, giving participants a sense of being abandoned after use.

However, from the data changes, the public opinion regarding the airdrop has not affected the TVL on EigenLayer; on the contrary, it has increased, rising from a peak of $14 billion on May 9 to $19 billion on June 16, and has now fallen back to $14.9 billion.

EigenLayer supports native restaking and liquidity restaking: 68% of the assets are native ETH, and 32% are LST. Currently, there are about 161,000 restakers on EL, but approximately 67.6% (about $10.3 billion) of the assets are entrusted to only 1,500 operators.

On July 3, EigenLayer posted on social platform X, stating, "Significant project advancements will occur in Q3." Community users speculate that it is highly likely that EIGEN tokens will support trading.

As of July 12, EIGEN tokens still do not support transfer or trading, with an over-the-counter secondary market price of $5.39 on Whalesmarket.

• New Restaking Project Symbiotic Backed by Lido and Paradigm

While EigenLayer was embroiled in public opinion controversies due to its airdrop rules, on May 15, it was revealed that Lido co-founder and Paradigm were secretly funding a new project, Symbiotic, to compete in the restaking track. In the community's view, the timing of Symbiotic's emergence seems more like a counterattack against EigenLayer's dominance.

On June 11, Symbiotic announced its official launch and completed a $5.8 million seed round financing, led by Paradigm and Cyber Fund.

Among them, Cyber Fund, the second-largest investor in Symbiotic, was co-founded by Lido co-founders Konstantin Lomashuk and Vasiliy Shapovalov, and the Symbiotic platform publicly stated that it supports users in restaking assets that are not natively compatible with EigenLayer, such as Lido's stETH.

Therefore, Symbiotic is also seen as a supplement to Lido's vacancy in the restaking track and a direct competitor to EigenLayer.

Unlike EigenLayer, which only supports ETH and its (LSD-type ETH) derivatives, Symbiotic supports a more diverse range of restaking assets, allowing any ERC-20 token to be deposited for restaking. For example, restaking assets not only support Lido's stETH, cbETH, and other LSD staking certificates but also support governance tokens ENA and stablecoins USDe from the stablecoin protocol Ethena.

This means that crypto protocols can launch native staking for their native tokens through the Symbiotic platform to enhance network security.

In terms of product form, Symbiotic supports customization based on developers' business needs, such as allowing users to choose their staking asset types, node operators, rewards, and reduction mechanisms when using Symbiotic's protocol or new networks. In contrast, Eigenlayer adopts a centralized management approach, with the official managing the entrusted staking ETH and node operators verifying various AVS, etc.

With the support of Lido and Paradigm, within just one month of its launch, the value of crypto assets deposited in Symbiotic has exceeded $1 billion.

As of July 12, the TVL on the Symbiotic platform is $1.09 billion, with the deposited Lido's wstETH valued at $760 million, accounting for about 70% of the TVL.

Currently, LRT protocols such as Ether.fi, Renzo, YieldNest, Swell, Pendle Finance, etc., have integrated with Symbiotic, allowing users to deposit assets on LRT to earn Symbiotic points.

LRT Protocol Mellow Based on Symbiotic

Mellow was originally a liquidity solution and a partner of the Lido alliance, allowing users to stake ETH on the platform to receive stETH and earn additional Mellow staking points. Additionally, Mellow helps Lido operators launch their own LRT to enhance the usability of stETH and increase revenue for Lido DAO members.

On June 4, Mellow announced a partnership with Symbiotic, launching as a modular LRT liquidity restaking project within its ecosystem.

Compared to common LRT protocols, Mellow is more like a creation of modular LRT infrastructure, allowing anyone to deploy or create LRTs with different risk or return ratios, such as traditional hedge funds, staking providers (like Lido), etc., supporting staking users to choose different risk configurations based on their needs for flexible risk management and yield optimization.

For users, they can directly deposit ETH into the Mellow platform, which will automatically transfer the ETH to Lido. Users will receive stETH and deposit the stETH into Symbiotic. By depositing ETH in Mellow, users can simultaneously earn dual points from both Symbiotic and Mellow platforms.

As of July 15, the TVL on the Mellow platform is $488 million, with earned Symbiotic points totaling 37 million.

• Karak Network: A Restaking Protocol Supporting Multiple Asset Types and Multi-Chain Deployment

Karak Network operates similarly to the Eigenlayer protocol, except that its AVS service is called Distributed Security Service (DSS), and it has also launched its own Layer 2 network, K2.

Unlike Eigenlayer, Karak aims to support restaking for any asset. Currently, the restaking assets supported on the platform include ETH, various LST and LRT assets, as well as stablecoins like USDT, USDC, DAI, USDe, etc.

Additionally, Karak is also multi-chain deployed, aiming to allow deposits on any chain. It has already established a presence on Ethereum, Arbitrum, BSC, Blast, Mantle, etc., allowing users to deposit assets based on their multi-chain distribution.

However, currently, the TVL on the Karak platform has exceeded $1 billion, and it does not support new fund deposits.

Bitcoin Chain Restaking Protocols: Babylon, Lombard, BounceBit

• Bitcoin Restaking Protocol Babylon

Babylon is a restaking protocol based on Bitcoin that introduces staking functionality for Bitcoin, allowing BTC holders to trustlessly stake their assets into other protocols or services that require security and trust, thereby earning PoS staking rewards and governance rights, while also transmitting Bitcoin's security to various middleware, data availability layers, sidechains, etc., allowing them to enjoy Bitcoin-level security at a lower cost.

From a business scope perspective, Babylon covers two aspects: first, BTC holders can stake BTC to provide security and trust layers for other protocols and earn rewards; second, it allows PoS chains or new protocols in the Bitcoin ecosystem to utilize BTC stakers as validation nodes, enhancing security and efficiency.

Babylon's co-founder stated in an interview with ChainCatcher that, in terms of operational mechanisms, Babylon is consistent with Ethereum's restaking protocol EigenLayer, but since Bitcoin does not support smart contracts, Babylon needs to take an additional step to make non-stakable Bitcoin stakable before it can be restaked.

On May 30, Babylon announced the completion of a $70 million financing round led by Paradigm. According to Rootdata, as of July 12, the total disclosed financing amount for Babylon has reached $96 million, with investment institutions including Paradigm, Polychain Capital, Framework Ventures, Polygon Ventures, Binance Labs, and other well-known capital.

Currently, users can experience the process of staking BTC through Babylon Testnet4.

Liquidity Restaking Protocol Based on Babylon

1. Lombard with $16 Million Seed Round Financing

Lombard is a liquidity restaking protocol built on Babylon. On July 2, it announced the completion of a $16 million seed round financing led by Polychain Capital, with participation from BabylonChain, Foresight Ventures, Mirana Ventures, Nomad Capital, and others.

Lombard's relationship with Babylon is similar to that between Renzo and EigenLayer; the BTC staked by users on Lombard will be automatically restaked on the Babylon platform to earn rewards.

The Lombard platform releases liquidity for BTC staked on Babylon through LBTC, meaning that when users deposit BTC on the Lombard platform, they will receive a proportional restaking certificate asset LBTC, which can be used in DeFi protocols for lending, trading, and staking, improving capital efficiency.

Currently, users can apply for a spot on the waiting list for the Lombard platform using their email.

2. Lorenzo

Lorenzo is also a Bitcoin liquidity restaking protocol based on Babylon, allowing users to directly deposit BTC into Babylon, which has previously received support from Binance Labs.

On May 28, Lorenzo announced the launch of the pre-staking Babylon event, where users can stake BTC to receive stBTC on the pre-staking Babylon event page. All BTC received by Lorenzo will participate in staking as soon as Babylon goes live.

Currently, users can stake BTC on Lorenzo to earn dual points from both Lorenzo and Babylon.

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#### Bitcoin Restaking Chain BounceBit

BounceBit is a BTC restaking chain designed specifically for Bitcoin, with major products including BounceBit Portal, BounceBit Chain, and BounceClub. Among them, BounceBit Portal serves as the user interaction entry point, BounceClub aims to become a combined ecosystem of CeFi and DeFi, and BounceBit Chain is the main module for restaking functionality.

BounceBit Chain is designed as the carrier for implementing restaking functionality within the BounceBit ecosystem, protected by the staked Bitcoin and BounceBit's native token BB. Middleware such as cross-chain bridges and oracles can gain security by introducing liquidity from BounceBit.

Specifically, users will mint new B-Token assets after transferring their native assets to BounceBit. For example, when users deposit BTC, they will receive BBTC assets that operate on the BounceBit mainnet.

Currently, BBTC assets can be used for two main on-chain activities: first, in BounceBit's mixed staking model, using BBTC + BB to participate in node staking, while the generated LST tokens can be used for further restaking activities to amplify staking returns; second, BBTC can be used for various DeFi applications on-chain to earn returns.

In April, BounceBit announced the completion of strategic round financing invested by Binance Labs. Earlier in February, it announced the completion of a $6 million seed round financing, with investors including Blockchain Capital, Bankless Ventures, NGC Ventures, DeFiance Capital, OKX Ventures, and others.

As of July 12, BB is quoted at $0.4, with an FDV of $800 million.

Solana Ecosystem Restaking Protocols: Solayer, Cambrian, Picasso

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#### Liquidity Restaking Protocol Solayer

Solayer is a restaking protocol in the Solana ecosystem that allows SOL holders to stake their assets into other protocols or DApp services within the Solana ecosystem that require security and trust, thereby earning more PoS staking rewards, similar to EigenLayer.

On July 2, it announced the completion of a builder round financing, with specific investment amounts undisclosed. Investors include Solana Labs co-founder Anatoly Yakovenko, Solend founder Rooter, Tensor co-founder Richard Wu, Polygon co-founder Sandeep Nailwal, and others. Previously, it was reported that three familiar VCs indicated that Solayer hoped to complete an $8 million seed round financing at an $80 million valuation. Rachel Chu from Solayer Labs stated that they are close to raising $10 million, with Solana's founder Anatoly Yakovenko participating.

Currently, Solayer supports users depositing native SOL, mSOL, JitoSOL, and other assets. As of July 15, the TVL on the Solayer platform exceeds $105 million, with SOL accounting for about 60%.

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#### Restaking Protocol Cambrian in Financing Negotiations

Cambrian is also a restaking protocol in the Solana ecosystem, supporting the staking of SOL and LST assets into middleware or DApp applications to earn more rewards.

It is reported that Cambrian founder Gennady Evstratov stated that the team is finalizing a $2.5 million financing deal, with three investors indicating a valuation of about $25 million. Cambrian plans to launch the restaking network by the end of Q2 or the beginning of Q3, along with a points program and token issuance.

As of July 15, Cambrian has not launched any staking products.

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#### Restaking Protocol Picasso

Picasso was originally a cross-chain protocol in the Polkadot ecosystem and announced the launch of SOL restaking services on January 28 to support SOL and LST liquid staking assets for protecting middleware, dApps, and L2 Rollups as AVS (Active Validation Services).

Currently, the restaking products on Picasso support SOL and LST assets such as JitoSOL, mSOL, and bSOL. However, the current platform has only $3.75 million in locked restaking assets.