According to several sources familiar with the matter, the project is called Symbiotic and has received support not only through Cyber ​​Fund, the venture firm of Lido co-founders Konstantin Lomashuk and Vasiliy Shapovalov, but also from crypto venture capital firm Paradigm, one of Lido’s leading investors. in case. The project offers users the ability to “restake” Lido’s staked ether (stETH) token and other popular assets that are not natively compatible with EigenLayer.

Developed by the team that previously founded a staking service called Stakemind, Symbiotic will be “a permissionless restake protocol that provides flexible mechanisms for coordinating node operators and economic security providers of decentralized networks.”

New actor Lido was a breakout sensation in DeFi a few years ago when it developed a protocol that allowed users to stake cryptocurrency to Ethereum but still receive an “stETH” token that they could trade. The project has become so popular that it is now the largest decentralized finance protocol on Ethereum and has $27 billion in deposits. It has reached such a dominant position that some actors have begun to worry about the operational risks of its undue influence.

But lately, Lido has been struggling with falling market share as users shift their assets to EigenLayer. EigenLayer is a newer service that allows users to stake Ethereum’s native ETH token to secure other networks.

EigenLayer has attracted nearly $16 billion in deposits since opening to investors last year, creating one of the biggest crypto success stories in recent memory.

Similar to EigenLayer, Symbiotic will offer a way for decentralized applications, actively authenticated services, or “AVSs,” to collectively secure each other. Users will be able to stake assets they have invested in other crypto protocols to secure these AVS, such as rollups, interoperation infrastructure or oracles, in exchange for rewards.

The main difference between Symbiotic and EigenLayer is that users can deposit any asset based on Ethereum’s ERC-20 token standard directly into Symbiotic - this means the protocol will be directly compatible with Lido’s staked ETH (stETH) token and thousands of ERC-20 This means that it will also be compatible with entities that use the standard. EigenLayer, on the other hand, only accepts ETH tokens.

Ironically, when crypto startup giant Paradigm approached EigenLayer co-founder Sreeram Kannan to invest in its project, Kannan rejected their offer in favor of rival venture capital firm Andreessen Horowitz, according to several sources familiar with the matter. Paradigm told Kannan that they would invest in his project’s rival.

With Uber, Lyft, and a potentially huge market for Restake taking over the industry conversation, the prospect of a strong EigenLayer competitor underscores just how eager companies and investors are to capitalize on Restake.