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Symbiotic: Leading Permissionless Protocol for Shared Security

Dive into Symbiotic, a cutting-edge protocol by Paradigm and Cyber Fund. Discover how it revolutionizes restaking with modular, permissionless architecture.

Author

Imperator

Date

Jun 19, 2024

Symbiotic Protocol restaking blog article
Symbiotic Protocol restaking blog article
Symbiotic Protocol restaking blog article

Introduction to Symbiotic: A Permissionless Protocol for Shared Security

Symbiotic is a groundbreaking, permissionless protocol providing shared security through restaking. Designed as a thin coordination layer that is flexible, permissionless, and reliable, Symbiotic is being developed by the teams at Paradigm and Cyber Fund. This innovative protocol allows network developers to have complete control over their restaking implementation and operator set.

Symbiotic proposes a modular, permissionless architecture for restaking, distinguishing itself from similar protocols like EigenLayer. Unlike EigenLayer, which only uses ETH (and LSTs) and EIGEN for security, Symbiotic will eventually allow any asset that meets the criteria for a vault to be used as collateral.

How Symbiotic Works

Understanding the functionality of Symbiotic restaking requires a deep dive into its fundamental components, which form the backbone of this permissionless restaking protocol. Here, we explore the essential elements that make up Symbiotic, providing clarity on its operations and the innovative mechanisms that drive it.

Networks

Networks are defined as protocols that necessitate a distributed set of node operators to deliver trust-minimized services. These networks are integral to the functionality of Symbiotic and encompass a variety of structures, including:

  • Appchains: These are application-specific blockchains designed to operate within a larger ecosystem, leveraging shared security and resources.

  • Rollups: Layer 2 scaling solutions that bundle multiple transactions into a single batch, improving transaction throughput and reducing costs while maintaining the security of the underlying blockchain.

  • Application-Specific Virtual Machines (AVSs): These are tailored virtual machines optimized for specific applications, providing an efficient and secure execution environment.

Each of these network types relies on Symbiotic to ensure a decentralized, secure, and efficient operational framework, enabling diverse applications to benefit from robust security and performance enhancements.

Collateral

Collateral in Symbiotic is a cornerstone of its restaking mechanism, providing the necessary security and flexibility to support a wide range of assets. Initially, the platform accepts various types of staked ETH, with plans to expand its collateral base. Here's a detailed look at the collateral types and mechanisms:

  1. Staked ETH: Variants of staked ETH available on Symbiotic include:

    • Wrapped Lido Staked Ether (wstETH)

    • Coinbase Wrapped Staked Ether (cbETH)

    • Binance Staked Ether (wBETH)

    • Rocket Pool Ether (rETH)

    • Mantle Staked Ether (mETH)

    • Swell Staked Ether (swETH)

    • Staked Frax Ether (sfrxETH)

    • Stader Staked Ether (ETHx)


  2. Future Collateral: Symbiotic's vision includes accepting a broad range of ERC-20 assets, including LP (liquidity provider) positions, enhancing the platform's flexibility and inclusivity. This forward-thinking approach aims to facilitate a new economy where various asset types can be utilized as collateral, broadening the scope and utility of Symbiotic's restaking protocol.

Users on the Symbiotic platform mint collateral tokens by leveraging their underlying assets, which are then deposited into dedicated vaults. These vaults establish specific rules for acceptable collateral and interface with networks to define terms such as slashing penalties and reward distribution, ensuring a structured and transparent operational framework.

Vaults

Vaults are the delegation and management layer of Symbiotic, playing a crucial role in handling deposits, withdrawals, slashing, reward distribution, and delegation strategies. Here’s a concise overview of their functions and configurations:

  1. Core Functions:

    • Deposits and Withdrawals: Users deposit their collateral into vaults, which securely manage these assets. Withdrawals are also managed through vaults.

    • Slashing: Vaults implement slashing rules to penalize operators who act maliciously or fail to perform adequately, maintaining network security.

    • Reward Distribution: Rewards from staking activities are distributed to users according to predefined rules set by the vault owner or creator.


  2. Delegation Strategies:

    • Vaults allow users to delegate their collateral to preferred operators within the network, optimizing performance and rewards.

By offering a range of configurations and delegation strategies, Symbiotic vaults provide a flexible and secure environment for managing collateral and staking activities, fostering a robust and resilient ecosystem.

Operators

Operators in Symbiotic are critical entities responsible for the infrastructure supporting the network. Their roles and configurations are vital for maintaining security, efficiency, and performance. Here’s a detailed breakdown of their functions:

  1. Core Responsabilities:

    • Infrastructure Management: Operators manage the essential infrastructure, including validating transactions and maintaining network security.

    • Protocol Execution: They execute network protocols, process transactions, produce blocks, and ensure compliance.


  2. Governance:

    • Operator Selection: Vault creators or owners select operators based on performance and other criteria.

    • Slashing Conditions: Defined slashing conditions penalize operators for malicious actions or failure, ensuring reliability.


  3. Interaction with Networks and Vaults:

    • Opting into Terms: Operators agree to network and vault terms, including compliance with slashing conditions and reward distribution policies.

    • Delegation and Rewards: Operators use delegated collateral for network operations, earning rewards distributed back to users.

Symbiotic ensures high standards of performance and security through detailed operator roles and configurations, fostering a robust ecosystem​

Resolvers

Resolvers are entities or contracts tasked with passing or vetoing slashing penalties incurred by operators on networks to which they provide services. They are agreed upon by vaults and the networks they secure.

Resolvers monitor slashing requests and have a window of time (epochs) to either veto the request or approve the slashing. Each slashing request has its own deadline for veto defined by the vault. Vaults have the flexibility to choose resolvers, and they can opt for a single resolver or multiple resolvers to cover their collateral.

Overview of Symbiotic

The interaction flow in Symbiotic involves restakers (individual users, institutions, or vaults), networks, and operators. Restakers must agree with the terms defined by networks and operators must opt-in to these terms. By abstracting the restaking layer to vaults, networks gain more versatility in agreements and collateral acceptance, leading to more tailored solutions for networks.

Vaults function as an intermediary layer between users, networks, and operators. Users deposit collateral into these vaults, which are configured by vault deployers or owners, to define specific delegation and staking strategies. Operators opt into networks and the vaults, utilizing the delegated collateral for validation. This collateral supports network operations, and the resulting staking rewards are distributed back to the users who deposited the collateral.

Vaults: The Core of Symbiotic Restaking

Initial Focus and Future Potential

Symbiotic will initially focus on staked ETH, but its general-purpose design allows for any ERC-20 asset as collateral. Over time, Symbiotic aims to support various assets and operator infrastructure groups. Network developers will have full control over their operator selection mechanics, enabling a wide range of participant configurations.

Configuration Options

Vaults can be:

  • Immutable and Pre-configured: Parameters are fixed during creation and cannot be altered, ensuring stability and predictability.

  • Owned and Updatable: Specific owners can modify vault parameters, allowing flexibility to adapt to changing conditions.

  • Curated by Multiple Operators: Managed by multiple operators, these vaults can set custom slashing limits, facilitating collaborative governance.

This flexibility allows for diverse governance models, from single-owner vaults to collaborative efforts by multiple institutions.

Mirroring Morpho for restaking

The structure of vaults and the configurations they enable resemble that of Morpho, a lending and borrowing platform which abstracts risk management to curators. In this sense, we can expect Symbiotic to be to restaking what Morpho is to lending and borrowing.

By abstracting this layer to vault curators, a new economy more optimized, secure and competitive can flourish, and users can choose to whom they wish to delegate their collateral.

Advantages of Symbiotic

Efficiency for Node Operators and networks

Node operators can leverage Symbiotic's infrastructure more efficiently, since they can accept the terms of the vault contract and run the given infrastructure, with no additional hustle.

Networks can choose vaults with geographically close operators for reduced latency, exclude specific operators, or accept various assets as collateral.

Comparison with EigenLayer

While EigenLayer restaking has pioneered the space, enabling secure protocol deployment outside of Ethereum and allowing users to restake their ETH, Symbiotic offers a more customizable and flexible system. Symbiotic aims to be a unified capital coordination layer for all asset types, providing developers with tools to customize and manage their collateral, slashing conditions, reward distribution, and delegation.

Symbiotic’s Novel Approach to Restaking

Symbiotic delineates the protocol-vs-agents boundary clearly. The immutable core contracts define the unchangeable parts of the protocol, whereas the other fully-customizable components (e.g., collateral assets, rewards, operators, slashing criteria) can be configured by the networks, stakers, and other agents.

Immutable Core Contracts and Customizable Components

This boundary makes restaking fully permissionless and open to innovation: the core is highly reliable with no governance and censorship risks, while open-ended external components enable fast deployment, creating a competitive environment and paving a clearer path for the expansion and derisking of the restaking market. The slashing risk will also be modulated with different implementations employed by networks, uncovering trade-offs within the evolving restaking landscape.

Team Behind Symbiotic

Backed by Paradigm and Cyber Fund, and partnered with Ethena, LayerZero, Hyperlane, and others, the team is well-positioned to advance Symbiotic's mission. The Symbiotic team includes:

  • Misha Putiatin: CEO of Symbiotic and Statemind.

  • Algys Ievlev: Co-founder of Symbiotic and Head of Audit at Statemind.

  • Felix Lutsch: Ecosystem at Symbiotic and former Chief Commercial Officer at Chorus One.

Conclusion: The Future of Symbiotic Restaking

Symbiotic represents a significant step forward in the evolution of permissionless protocols for shared security. By offering a flexible, modular architecture for restaking, Symbiotic provides network developers with the tools they need to navigate decentralization while prioritizing safety and capital efficiency. With its innovative approach to collateral, vault management, and operator coordination, Symbiotic is poised to become a key player in the decentralized security landscape.

For more detailed information on the workings of Symbiotic restaking, including its core modules and specific vault configurations, refer to the official documentation here.

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