Re:Staking Weekly #14

Interview with Symbiotic, EigenLayer's AI Slashing Judge, CapLab's Restaking-Backed Stablecoin, and Red Oracle's Tokenomics

Feb 17, 2025

Welcome to Issue #14 of Re:Staking Weekly! 👋

This week's content takes a different turn. For the first time, we sat down with Symbiotic's head of ecosystem, Felix Lutsch, to talk about Symbiotic's strategy and his personal take on restaking, competition, DeFi, and much more.

Also happening this week: EigenLayer's collaboration with Sentient to build domain-specific AI agents that help differentiate and judge subjective issues, including slashing. Pretty wild, right? We also have a podcast with Sreeram discussing real crypto apps, EtherFi's new rewards launch, CapLabs' restaking-backed stablecoin explainer, and more.

Let's dive in! 🚀

Symbiotic: finding balance between competition, neutrality, and innovation

After diving deep into EigenLayer for quite a while, we're switching things up this week with a fantastic conversation featuring Felix Lutsch, Symbiotic's Head of Ecosystem. Felix joined us to share his insights on where Symbiotic stands today and its vision for the future, along with his own perspectives on restaking, rewards, DeFi partnerships, and more.

Below you'll find the key insights from our conversation, but if you want to get the full breadth of the episode, watch the podcast from the link above!

You Cannot Resist the Emergence of DeFi

One thing that struck me long after the conversation was Felix's perspective on DeFi and Restaking.

Restaking itself is innately a part of DeFi, having evolved organically from staking after Ethereum's PoS transition and Lido's emergence
One key truth about crypto and DeFi is its unstoppable, permissionless nature. If DeFi is meant to happen, it will.

Given these two fundamental aspects, DeFi's evolution within the restaking ecosystem is inevitable.

Nonetheless, this isn't to say that Symbiotic is going all-in on DeFi. Quite the contrary. Currently, Symbiotic aligns closely with EigenLayer's strategy of staying neutral, but the project does show a slightly more welcoming stance toward DeFi activities through its Mellow partnership, which has been there since day one.

As the second-largest restaking protocol, Symbiotic still needs to balance its core focus — growing networks and helping new ones launch — but I can't imagine a restaking ecosystem with fewer DeFi integrations going forward. From where I stand, we're just at the beginning of this growth curve.

A common path for Networks

Of course, we can't skip the question about rewards, as almost all networks are still figuring out how to reward their infrastructure participants.

One particular insight from Felix that resonated with me is that we ask about rewards because there's no common roadmap for these experimental, flexible, and modular networks to reference. Being custom and unique to their niche markets and users, these networks can't simply follow the traditional L1 launch pattern: testnet, mainnet, improvement proposals, and hard forks. Some projects need to launch just a section of the network to test validity, while others require vast participation to get going.

Looking ahead, establishing a commonly understood progression path could not only help networks follow a more consistent pattern and bring transparency to network transitions - from points to tokens, from basic security to advanced features - but also help users better understand when these key milestones will unfold.

Lido v3 - The signal for diverse staking demands

Lido has traditionally been very risk-averse due to its sheer size and scale. When asked about Lido's newest updates, which boast a similar restaking infrastructure utilizing stETH, Felix believes this signals two important trends to the market:

It validates the demand for a more modular staking and restaking infrastructure across varied ecosystems
It signals a growing adoption of restaking through different risk designs and its acceptance in the mainstream

We'll have to wait and see how Lido's v3 updates unfold, but it won't be short on excitement, competition, and diverse verifiable networks.

A Real Role for AI in Crypto Governance

Crypto has been objective since day one, with its "code is truth" motto. It took us years to start realizing that our society is filled with subjectivity - perhaps the first principle of human psychology.

Restaking was intertwined with subjectivity from the start. The initial design of the veto committee aimed to fix the problem of slashing, where an operator's malfunction can often be non-intentional and the slashing criteria frequently involves subjective elements (like oracle inputs).

However, similar to many DAOs, the veto committee's success depends on participation and domain knowledge, which the commons often lack. This is where AI can be extremely useful, if properly trained and fine-tuned for specific use cases.

I'm excited about the collaboration between EigenLayer and Sentient not only because this is a perfect opportunity to let AI operate in its most suitable domain but also because the marriage of AI and restaking solves a critical problem: slashing needs nuanced determination mechanisms to achieve true fairness and equality.