Key Takeaways
The launch of Symbiotic vaults represents a groundbreaking development for the restaking primitive. These new vaults will enable deeper liquidity, introduce a new restaking interface, and provide the flexibility to curate various vault strategies with distinct risk profiles.
On day one, we launched five Gauntled-curated Symbiotic Vaults:
- Gauntlet Restaking wstETH
- Gauntlet Restaking cbETH
- Gauntlet Restaking wBETH
- Gauntlet Restaking swETH
- Gauntlet Restaking rETH
Users of Gauntlet-curated Restaking Vaults will collect Symbiotic Points in addition to staker rewards.
In 2023, restaking emerged as a new approach to pooled security, and we inquisitively went down the rabbit hole. We researched the emerging risk and allocation questions to help our partners, including Puffer, Swell, and Fragmetric, as well as the industry at large, better understand this quickly growing space. After more than a year immersed in restaking, we are even more confident that restaking represents an important cryptoeconomic primitive. You can read some of our past research below or visit our content resources page and explore our 2024 recap:
- AVS Selection Framework: We lay out a mathematical framework for approaching AVS selection, which will ultimately drive better capital efficiency.
- Optimizing AVS Allocations for Liquid Restaking Tokens: We explore various options for EtherFi’s AVS allocation strategy and determine how it may impact its yield accrual.
- Restaking Collateral Health: We suggest a comprehensive framework for evaluating collateral health in the context of restaking protocols and AVSs. An AVS’s economic security is associated with the price stability of its collateral, since a drop in the collateral’s market value can create profitable attacks to corrupt the AVS.
In this blog, we cover:
- A (re)primer on staking
- A breakdown of our vaults: the structure of Symbiotic Vaults and our vault strategies
The case for restaking: a (re)primer
The core of Restaking is about using staked capital to secure more than a single PoS network — a concept known as shared security.
A proof-of-stake (PoS) network like Ethereum gains security, resiliency, and trustless consensus from node operators, called validators, that stake capital to participate in the network. Validators are incentivized by slashing to be reliable and act honestly, given their financial stake in the network. If an Ethereum validator acts dishonestly or makes significant mistakes, they may lose a portion of their staked tokens (i.e., slashing).
In addition, as staking yield innovation has developed, yield itself has compressed. Vaults offer a new source of staking yield.
Restaking builds on the idea of staking by strategically reusing staked capital to secure blockchain infrastructure projects built on an underlying PoS chain that require their own network of nodes to handle whatever consensus operations are necessary. This approach leverages the inherent security and consensus-building capabilities of PoS networks to secure a broader range of projects while allowing stakers and node operators to increase the rewards they earn from their staked capital (though not without accepting additional risk).
Breaking down our vaults: isolated strategies
Symbiotic Vaults open a new path for restakers to access risk-adjusted yield on their restaking capital without having to directly allocate to operators or use an LRT. The flexibility built into Symbiotic Vaults allows curators like Gauntlet to tailor different vaults to specific risk profiles.
The structure of Symbiotic Vaults
Vaults serve as a flexible staking layer connecting collateral to networks. Users can deposit their collateral into vaults and benefit from staker and network rewards in the form of risk-adjusted yield. Curators like Gauntlet decide where to allocate that collateral (shared security) and can tailor the risk profile of each vault by determining which networks and operators have access to the collateral.
The main pillars of a Restaking Vault include:
- Collateral asset (ERC20) — users supply this asset into the vault
- Operators — the vault allocates to a set number of operators
- Networks — operators allocate to networks predetermined by the vault curator
Two important actors play a central role in Restaking: operators and networks, where operators can allocate across N networks. Vaults allow curators to manage the economic risks that arise from allocating across various operators. The matrix of allocations across and between operators and networks is the variable that defines the different risk profiles on Symbiotic Restaking Vaults.
Our vault strategies
Our vaults run isolated strategies, with one collateral type per vault at launch. Each vault has a unique risk profile determined by the underlying restaking collateral and the mix of Operators and Networks to which the collateral is allocated.
Our five initial Symbiotic vaults aim to maximize the number of network allocations without exposing users to excess slashing risk across all preferred collateral options. To accomplish this, we approach each vault by evaluating network allocation, collateral selection, and operator onboarding. Follow our socials for new network announcements.
To ensure risk is managed beyond the allocation decision, we have instituted both onchain and off-chain controls to enhance monitoring and slashing response. As the number of networks expands, so will the available strategies that we can deploy as a curator. At launch, we will be running a minimax allocation strategy. Over time, we will expand our vault set to include the following strategies:
- Target risk-optimized yield volatility
- Passive vs. active restaking yield from Networks
- Broadly adopted DeFi assets vs. network tokens
- Growth asset yield
- Category-specific vaults (DA, interoperability, infrastructure, etc.)
As opportunities present themselves, we will expand into other popular collateral assets. Read more about our vault strategies here.
For institutional users, contact us here. We can tailor vaults to a specific user’s needs and desired exposure.
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