CoinDesk Report:
Source: unchainedcrypto Translation: GoodOppa,
The EigenLayer protocol gained popularity for pioneering Ethereum token re-staking. However, the protocol recently decided to exclude U.S. and Canadian users from participating in the upcoming EIGEN token airdrop, drawing attention to other staking protocols like Karak and Symbiotic.
But how do Symbiotic and Karak differ from EigenLayer?
In this guide, we’ll explore the emerging proof-of-stake protocols Symbiotic and Karak, their distinctions from the EigenLayer protocol, and how they differ from each other.
What is re-staking?
Re-staking involves further staking of staked assets or liquidity staking assets to secure other networks or applications.
The concept aims to reuse idle assets to fund the launch costs of new protocols and incentivize re-stakers through re-staking rewards.
What is EigenLayer? What role does it play in Ethereum’s re-staking ecosystem?
EigenLayer facilitates the re-staking of already staked ETH and allows stakers to earn additional re-staking rewards for their contributions.
The protocol leverages re-staking to export Ethereum’s trust infrastructure to new protocols lacking sufficient resources to incentivize new validators.
However, EigenLayer’s current focus is on re-staking ETH assets and Lido’s liquidity staking tokens (LST), with plans to expand network coverage in the future.
This initial scope creates opportunities for its two emerging competitors, Symbiotic and Karak.
What is Symbiotic?
Symbiotic is a new competitor in the re-staking space where validators can re-stake their assets in a permissionless manner to achieve shared security.
Symbiotic features modular design, supporting re-staking of various ERC-20 tokens (including stETH), and allowing developers full control over the entire re-staking process. Its minimal coordination layer can integrate into existing or new protocols. Additionally, its flexible re-staking logic lets developers choose collateral assets, validator nodes, rewards, and slashing mechanisms they prefer.
Key Features of Symbiotic:
Multi-asset collateral: Symbiotic supports re-staking from various networks, including ERC-20 compatible assets, LP tokens, and other digital assets.
Vaults: Custom contracts for handling collateral deposits across networks.
Operators: Entities managing infrastructure for the network.
Resolver: Multi-purpose contracts approving or rejecting slashing penalties incurred by operators on the network they serve.
Pros and Cons of Symbiotic:
Pros:
Flexibility for developers to customize re-staking protocols according to their needs: Networks manage re-staking implementation while re-stakers can opt in or out of shared security contracts.
Affordable security provision: Provides high-quality security by collateralizing multiple assets, making security costs affordable and eliminating complexity in building secure protocols from scratch.
Enhanced capital efficiency: Provides a scalable method for cryptocurrency holders to fund the launch costs of new projects.
Cons:
Limited scale of collateral: Phase-out limits on collateral assets supported, restricted to major protocol assets.
What is Karak?
Karak is another newcomer in the re-staking domain, distinguishing itself from EigenLayer and Symbiotic by offering a more comprehensive shared security approach.
The protocol supports various assets such as ETH and LST like EigenLayer’s core products, but further adds LP tokens, stablecoins, WBTC, and StaFi’s Liquid Staking Tokens (LRT).
Karak allows stakers to re-stake their staked tokens and submit their assets to distributed security services (DSS) on the Karak protocol, granting additional execution rights to their staked assets.
Key Features of Karak:
Restakers: Participants protecting Ethereum and other networks in exchange for rewards.
Distributed Security Services (DSS): Utilizes re-staked assets to enhance security while reducing operating costs.
Chains: Chains or aggregations utilizing services provided by distributed security services.
Operators: Individuals or entities verifying distributed security services.
Pros and Cons of Karak:
Pros:
Multi-asset re-staking: Allows re-stakers to provide a basket of assets to DSS, mitigating the risk of individual asset failures affecting DDS.
Unrestricted re-staking: Enables developers to build on L2 and sidechains instead of focusing solely on Ethereum L1.
Turnkey development: Karak’s robust protocol allows developers to seamlessly iterate and deploy new unique services.
Cons:
Infeasible for staking rewards on ETH assets: Sustainably profitable models are only achievable by accepting assets with capital costs lower than ETH.
Comparison of EigenLayer with Karak and Symbiotic:
Symbiotic and Karak offer two compelling approaches to redefine our understanding of re-staking. EigenLayer focuses on Ethereum’s core infrastructure, providing a robust foundation for secure decentralized applications.
However, this only scratches the surface of numerous possibilities.
Symbiotic is emerging as a leader enabling networks to economically secure themselves from a variety of collateral assets. Its scalable network allows other networks to customize their re-staking implementations.
Karak opens new possibilities for interoperability and capital efficiency across multiple ecosystems through its broad asset support. The protocol may introduce a dual-staking approach in the future, encouraging active participation from users and service providers.
Summary:
As Symbiotic and Karak continue to contribute to the re-staking space, network builders and users will gradually recognize their respective capabilities and limitations. These protocols are poised to drive further innovation in the Ethereum ecosystem by enhancing the utility and security of staked assets.
