Re:Staking Weekly #7
Restaking Progress Report 2024, EigenLayer Launches Slashing on Testnet, and Aligned Layer's Airdrop Program
Merry Christmas everyone! 🎄 I hope you're all enjoying the holiday season.
Welcome to the final Re:Staking Weekly of 2024.
Today, we're taking a panoramic view of the restaking ecosystem – comparing key protocols like EigenLayer, Symbiotic, Jito Restaking, and Babylon, tracking their growth over the past year, and exploring what makes each unique.
Plus, we've got some major developments to unpack: EigenLayer just dropped their slashing feature on testnet, several protocols have hit mainnet and are going for airdrops, and there's plenty more to explore.
Buckle up for a packed edition – let's go!
Restaking Progress Report 2024
Disclaimer:
The writers and editors of this newsletter operate projects within the EigenLayer ecosystem. So yes, we're super biased. Read this with a grain of salt.
Grouping these restaking protocols can be misleading, since they differ significantly from both business and technical perspectives. Consider our comparisons here as broad strokes rather than detailed analysis.
Last week's biggest news in the restaking world was EigenLayer's slashing feature finally hitting testnet (see tweet | our analysis).
Looking back to the beginning of this year, we've seen the rollout of service delegation, permissionless service and operator onboarding, rewards, and now slashing - completing the major features promised in EigenLayer's proposed restaking infrastructure.
For those of us in the EigenLayer ecosystem, each feature release feels like Christmas - a moment of celebration and new possibilities. But beyond our corner of the restaking world, I've been wondering: what's happening in the broader landscape? From direct competitors like Symbiotic to other participants in the Bitcoin and Solana ecosystems?
Let's find out.
The Statistics
First off, the basics. How far along is each restaking protocol in terms of TVL, Networks/Services, Operators, and Restakers?
Just looking at the raw numbers, EigenLayer is still dominating TVL with a lead that's hard to ignore – we're talking 8x more than its closest Ethereum competitor, Symbiotic. When you zoom out to the broader ecosystem, they're sitting at roughly 3x Babylon's TVL and a whopping 377x what Jito Restaking has accumulated in the Solana ecosystem.
But here's where it gets really interesting: peek beyond TVL at the services and operator metrics, and you'll find that EigenLayer is the only protocol with live services operating on mainnet and distributing rewards. More importantly, the operator count reveals a crucial distinction – no other restaking protocol has permissionless operator onboarding, explaining the huge gap in operator numbers. This matters tremendously for decentralization, restaker sentiment, and network confidence.
Product Development
One of my personal interests is to also take a look at the product development of these restaking protocols. From a restaker perspective, what can I expect from using the restaking protocols now?
The product landscape is even more polarizing than the TVL stats. For EigenLayer, it's more or less a full-featured setup where users can deposit, delegate stake to operators, and get a basic understanding of AVS selection for operators and associated rewards. That's not to say the app experience is perfect — there's still lots of room to grow in helping users intuitively understand operator delegation and the rewards structure. We're also waiting to see the operator set breakdown, slashing conditions, and other nice-to-have features displayed on the frontend.
However, this is already dramatically ahead of what Symbiotic, Jito, and Babylon have to offer. All three only allow users to deposit assets to earn points, and that's it. From a user's perspective, this means these protocols are still in the liquidity aggregation phase, and none of this aggregated TVL is actually being distributed to secure services or networks. We're potentially looking at another 6-12 months of development for these restaking ecosystems to take shape.
Stage of Development for Restaking Protocols
It's clear that EigenLayer has emerged as the only protocol that's truly graduated beyond the points gold rush – with live stake delegation to operators, permissionless operator participation, and services that can build without needing hand-holding from a support team.
The last several months were slightly painful for the EigenLayer ecosystem as it readjusted expectations after the rewards launch, shown by the slow seepage of TVL. Can slashing become an inflection point to boost market sentiment and service onboarding, driving the ecosystem toward the goal of an efficient restaking marketplace and modular POS engine for Web3? We'll see how this unfolds in Q1 2025.
Nonetheless, if other restaking protocols follow similar development stages as EigenLayer's roadmap, they're still at the earliest point of their journey and will likely face challenges around service onboarding and TVL withdrawal from the lack of ecosystem yields.
For projects like Babylon and Jito, their marginal deployment ratios (0.12% for BTC and 0.038% for SOL) suggest room for growth, potentially catering to Bitcoin or Solana-specific services. But for Symbiotic, the competition with EigenLayer appears fiercer than ever.
Read more
News Bites
EigenLayer has announced the launch of their slashing feature on Holesky Testnet. Read technical details here.
Hot take from Sreeram: a feature-complete restaking protocol is a universal Proof-of-Stake system for off-chain networks.
Swell Network launched its restaking chain.
Aligned Layer's genesis airdrop registration is now open. The foundation will airdrop $ALIGN tokens to 1 million addresses.
Hyperbolic Labs — decentralized & restaked AI services with Proof of Sampling verification mechanism.
Ray Zhu's thesis on EigenLayer's repositioning as a decentralized cloud platform for AI agents.
Food for Thought
Hi all, Servet here!
We've analyzed 4 different restaking protocols this week, and it turns out the EigenLayer ecosystem is also eyeing the market of other blue-chip assets.
Nuffle Labs, an EigenLayer ecosystem project, aims to allow users to restake and receive rewards from their assets natively, meaning users will be able to not only restake using other blue-chip assets like BTC or SOL but can do so natively on their respective L1s.
As we've discussed, community and developer participation from other ecosystems has the potential to unlock huge TVL and numerous use cases, such as cross-chain lending and borrowing. It will be both interesting and exciting to see how EigenLayer and its ecosystem compete for the broader restaking market share and watch money legos being built on top of each other within the EigenLayer ecosystem.
That's it for this week's newsletter! As always, feel free to send us a DM or comment directly below with your thoughts or questions.
If you want to catch up with the latest news in the restaking world, give our curated X list a follow!
See you next week and thanks for reading,