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Lido Co-Founders Funding EigenLayer’s Rival: Pointing DeFi Battle?

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Lido co-founders Konstantin Lomashuk and Vasiliy Shapovalov funded a restaking startup company to compete with EigenLayer, the second-largest DeFi protocol. 

Lido, a liquidity staking protocol on the Ethereum (ETH) blockchain, helped Symbiotic, a restaking startup company. Venture capital (VC) firm Paradigm has joined hands with Lido co-founders to redefine the decentralized finance (DeFi) landscape. 

Why are Lido Co-founders and Paradigm Supporting this New Player?

On May 15, a report revealed that Lido co-founders and Paradigm, a research-driven technology investment firm, have invested in Symbiotic.

Wu Blockchain tweeted the secret funding process and Lido’s motive.

Funding Ethereum’s restaking protocol EigenLayer competitor may result in a DeFi battle. However, apparently, the motive is to redefine the DeFi landscape.

Before funding the new startup, Paradigm approached the co-founder of EigenLayer, Sreeram Kannan, and faced rejection. EigenLayer joined hands with Andreessen Horowitz (a16z), a VC that backs bold entrepreneurs.

However, no comment or response has been received from Paradigm, Cyber Fund, or Symbiotic.

EigenLayer vs. Symbiotic: The New Battle in Making 

Symbiotic, the project will allow users to ‘restake’ using Lido’s staked ether (stETH) tokens and other digital assets incompatible with EigenLayer. Direct deposit of any token based on Ethereum’s ERC-20 token standard made Symbiotic a key competitor of EigheLayer.

EigenLayer, on the other hand, currently accepts ETH assets, several ETH-linked liquid staking tokens (LST), and native EIGEN tokens.

According to the Dune Analytics report, EigenLayer had over 5.4 Billion total staking points and 119,501 unique addresses. Unfolding the Total Value Locked (TVL) growth data, a sudden spike was recorded between December 2023 and May 2024.

EigenLayer TVL Growth I Source: Dune

On December 6, 2023, the TVL in ETH was recorded at 408,478 and hit 5,004,805 on May 15. The data shows that EigenLayer is gaining popularity and attracting more and more stakers towards the staking services.

Lido & Lido Alliance Proposal

Lido is a decentralized autonomous organization (DAO) that decides on the upgrades and parameters of liquid staking protocols through voting. The DAO recently announced its new proposal on X, which is the ‘Lido Alliance.’

The new proposal will act as a framework for the Lido DAO to support the protocol to enhance security. The motive of Lido Alliance is to create a desiccated Alliance workgroup of Lido contributors to navigate the potential alignment & development activities.

As of now, the proposal is in progress, and one vote out of six has been received.

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