Top Places to Move Your LRTs

By Messin' With Cryptos | MWC | 23 Jun 2024


Hey folks, so there’s a couple of catalysts coming up that if you’re like me, you might be wondering if you’re getting the best returns on your Liquid-Restaked Ethereum (LRTs). First, there’s there’s a major claim date for many of the major Pendle YTs (yield bearing tokens) which mature on June 27th, and then second, the season 2 alrdrop for Ether.fi, the largest LRT protocol, appears all but imminent.

If you’ve been out of the game and need a refresher about re-staking and how it’s become one of the biggest narratives this bull cycle, I highly recommend that you check out my article on Ether.fi and Eigenlayer that I wrote earlier this year

Seeing as they’re the most trusted re-staking protocol out there, I’m still going to be holding on to a good chunk of my $eETH and I’ll probably still be utilizing some strategies on Pendle, but now with some newer competitors in the game, in today’s article I’ve curated some of the best places that in my opinion have some of the largest upside towards getting maximum returns for your re-staked $ETH, and why it might be a good time to rotate your LRTs.

Mitosis

The first strategy is one that I’ve written about before which is Mitosis. As a quick recap, Mitosis is a modular cross-chain liquidity protocol, providing increased capital efficiency while at the time same accruing high yields. From what I’ve gathered, similar to bridges like Across, Mitosis utilizes an intents-based approach, where it acts as an orderbook relayer for different DeFi apps across multiple blockchains.

During Epochs 1–3, assets which were deposited accrued bonus multipliers in Mitosis points, however part of the trade off was that you were unable to withdraw funds until the Epoch was over. However now as Mitosis has entered its final 4th Epoch, users have free redemption of theirLRTs at any time. (To note, there is a penalty point reduction when withdrawing your LRTs which gets redistributed back to the community, but this does not equate to a loss of principle.)

Why Mitosis? There’s a few different advantages for putting your LRTs on Mitosis opposed to other protocols. These include:

  1. Withdraw funds easily — Unlike other protocols, there’s no significant wait/unlock times needed in order to withdraw your funds.
  2. Still early — Recently I just topped up more with the start of Epoch 4, but even when I first got in at the beginning of Epoch 3, I already made it into the second-to-top tier, Platinum, which is in the top 10th percentile — all this with less than 0.5 $ETH supplied.
  3. Double-dipped partnerships — Mitosis allows the deposit of $eETH which still gives you exposure to EtherFi, as well as exposure to Linea Surge LXP-L, that is if you’re farming points on Linea.
  4. Well funded — As recently as last month, Mitosis just raised $7 million in seed funding

Points, points, points — As I mentioned in my previous article, regardless of whether or not you choose to deposit your LRTs into Mitosis, it still behooves you to get an account and to amass points based on badges —a method that can still earn you 10’s of 1000’s of points. Depending on how many points you earn, you can make your way up the following 5 tiers:

If you do decide to supply some of your LRTs, consider using my referral code 9UYGPC after you signup. This of course helps me out, but even if you don’t use mine, I still recommend you at least enter someone else’s referral code for it will give you an automatic 1.15x point accrual boost. At the very least, I highly recommend that you check out their discord to see what roles you’re eligible for — roles which will in turn qualify for corresponding point badges. One of the roles they just added as of this week, are for liquidity holders on Mellow and Symbiotic, which incidentally is the protocol I’ll be talking about next.

Mellow (and Symbiotic)

In response to losing a significant amount of market share in staked $ETH, Lido and Paradigm (the VC that backs Lido) have most likely seen the writing on the wall which has cause them to invest heavily into Symbiotic, a protocol which may become Eigenlayer’s biggest competitor.

Although there’s currently no Active Validator Sets (AVS) that I’ve heard of that are utilizing Symbiotic (yet), there’s been a great deal of hype around Symbiotic and great speculation for how much they might be able to break into the re-staking market, especially considering that Eigenlayer can only utilize $ETH, $EIGEN and other $ETH-derivatives, whereas Symbiotic can technically accept anything that’s based on an ERC-20 standard.

Not to go down a technical rabbithole, I would have made Symbiotic into its own standalone section, yet currently at time of writing, all of Symbiotic’s restake-able assets have reached their capacity:

Enter Mellow — As we talked about before, Mitosis’ current focus is using re-staked $ETH mostly via Eigenlayer, yet Mellow.finance is one that focuses on $ETH staked via Symbiotic. Although it’s bound to reach capacity quickly as well too, Mellow currently offers Liquid Restaking Vaults where you can currently earn both Mellow and Symbiotic points — 1 per hour per 1 $wsETH/ETH/WETH deposited. Currently at time of writing the Re7 Labs LRT vault is about 70% capacity (although about an hour ago when I checked it was around 60%):

If you can’t pull the capital together immediately I wouldn’t worry about it too much, because similar to what we saw with Eigenlayer, I imagine that with this much demand, they’ll probably be raising the deposit caps in the future.

Why Mellow? There’s very little surprise as to why so many of Mellow’s deposit limits have already been reached.

  1. Trust — Lido (and Paradigm) are perhaps the most trusted names in the liquid-staking game, so it seems logical that they’ll be trusted greatly with liquid-restaking as well.
  2. ERC-20 — As I mentioned before, Symbiotic has already upped the game by being able to accept anything that’s based on an ERC-20 standard.
  3. Well-integrated — Despite having no AVSs, Symbiotic already has integrations with protocols like Ether.fi’s “Super Symbiotic LRT vault” which earns Symbiotic points as well too

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4. Well-funded — not as quite as good as Mitosis’ $7 million, but Symbiotic has raised a nice $5.8 million during its seed round.

 

Karak

Symbiotic has been able to expand Eigenlayer’s model by accepting anything on the ERC-20 token standard, yet protocols like Karak allow for re-staking of multiple different assets across multiple different networks. Karak.network, which has already amassed a cool $1 billion dollars in TVL, is set apart from others as it utilizes its own Karak network known as ‘K2,’ where a variety of assets can be utilized to enhance “bootstrapping and composability across various networks.” For this reason we see dozens of different assets, including Ethereum LSTs and even stable coins that can be supplied and restaked, earning Karak points and their native points such as Ethena Sats or Etherfi points:

Why Karak? Karak has some massive potential as noted by the following indicators:

  1. Well-funded —If you thought $7 or $5.8 million was nice, Karak is also heavily backed by some major players including Coinbase Ventures and Pantera Capital, with a whopping total raise of $48 million dollars.
  2. Still Early— Despite its massive TVL, as far as I know Karak is still early access invite only and requires an invite code — a code which you can probably get off of their discord. (You’re more than welcome to use mine as long as they last: bB9S7, C1sqj, ZPe3O, njSad, nAHnd.)
  3. Points are already priced — If you take a look at Whales Market, Karak points are already trading pre-market at a current price of about $0.0077 per point:

Zircuit

The last place I’ll highlight is perhaps the biggest, with about $3.2 billion in total value re-staked, is Zircuit — a zkEVM layer 2, which provides “sequencer level security.” I won’t go deep into the technicals, but as you can see from the graphic below, Zircuit also takes major Ethereum derivates, native $ETH (not pictured) as well as Ethena’s USDe:

Although it has its own re-staking program, since it’s an L2 Zircuit is probably more comparable to other L2s like Mantle, where it uses zero-knowledge rollups to process its transactions. Additionally unlike many of the other protocols on this list, Zircuit doesn’t appear to have a wide aray of backers — the only one I could find is Binance Labs, from whom Zircuit received an “undisclosed amount” in a seed round earlier this month.

Why Zircuit? Despite the ambiguity behind its funding, there’s a few really cool things about Zircuit that are worth checking out:

  1. No lockup/withdraw — Apart from retaining any native points you may be earning from holding one of their LSTs, Zircuit advertises absolutely no lock-up or withdrawal periods, or in other words, your re-staked assets can be withdrawn immediately.
  2. L2 Growth — if their SLS proves successful, being an L2 (as opposed to being just a dapp), arguably causes the ceiling for Zircuit’s growth and profitability to be much higher than that of a dapp, a possibility that easily explains how they’ve been able to accumulate such massive TVL in such a short period of time.

Conclusion

The re-staking space has gotten considerably more competitive over the past few months, which if we’re zooming out, is something which I think is incredibly healthy for the market. That being said, many of these protocols and networks are still very new, meaning that they still could carry considerable smart contract risk despite their respective audits.

Another factor that does increasingly worry me however is that this certainly adds more layers to the ponzishness of re-staked yields. Just taking the last protocol Zircuit for instance — you’re now being tapped into 5 different potential yield/point streams: native $ETH staking yield, re-staking yield, $EIGEN, Liquid-restaked protocol points, and Zircuit points. Although the prospect to 5x your yields on the surface seems extremely attractive, I can’t imagine that all those revenue streams will be worth something significant in the long run.

Are there any protocols that I’ve missed on this list? Or any factors that I haven’t considered? If so, I’d love to hear about it in the comments below.

And as always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!

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Messin' With Cryptos
Messin' With Cryptos

I've made a ton of mistakes along the way in the world of Defi and cryptocurrency. Hopefully by taking some of the lessons learned and cues i've went through, you'll be a bit more success


MWC
MWC

Follow me on twitter! @CryptosWith https://twitter.com/CryptosWith https://medium.com/@CryptosWith/

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