Is Solayer’s Restaking a good business?

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雨中狂睡
08-14
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Is Solana Restaking a good business?

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Why did Binance Labs invest in Solayer?

What is the difference between Solayer and Jito Restaking?

Today I would like to talk about my views based on the current information.

First of all, if we want to quickly understand the project, we can easily see Solayer’s project profile and investment background through Rootdata.

Solayer received investment from Binance Labs in its latest round of financing. In the previous round of Builders Round, Solana co-founder Anatoly, Solana core circle influencer Ansem, Polygon co-founder Sandeep, Babylon chief strategy officer Dong Xinshu, Tensor co-founder and Solend founder all participated.

I believe that the core of creating content in this current market is not to introduce the protocol architecture in detail or analyze the protocol data, but to explain clearly how the market should perceive this project. Therefore, starting from this article, I hope to change the previous writing style, abandon the previous long introduction to the protocol architecture and data, and directly talk about my understanding of this project.

Protocol architecture: https://docs.solayer.org/getting-started/introduction

Protocol data: https://defillama.com/protocol/solayer#information

The current market perception of Restaking is dominated by Eigenlayer, which aggregates and expands Ethereum's economic security (shared security) through $ETH Restaking. In short, public chain teams can use EigenDA as a DA layer. Celestia's DA service is its competitor. However, it is worth mentioning that although the DA service is a simple business, it needs enough customers and their application users to prosper in order to make this flywheel turn.

Although Solana Restaking has the same name as Ethereum’s Restaking, their business focus and target customer groups are completely different. Eigenlayer focuses more on providing services to the outside world (exogenous AVS), while Solayer focuses more on providing services to Solana’s internal applications (endogenous AVS). Of course, Solayer can also be expanded externally, and this is only the first phase of Solayer.

I think the Solayer blog explains their business model in Phase 1 very well:

设想Solana 是一条高速公路，拥有多个车道，不同车道的收费及拥堵程度不同，代表着不同的Staking Tiers。而不同DApp 作为通行的汽车所需速度和能接受的收费也有所差异。Solayer 通过接受用户资金委托充当着协调汽车（DApp）、高速公路各个车道（Validators）、各个车道的收费站（Restakers）等多方的角色。

In other words, DApps in the Solana ecosystem can use Solayer's services according to their own needs (block space and priority transactions) to ensure that they are in the fast lane or slow lane, thereby bringing a better experience to users.

The benefits of users participating in Solayer Restaking come from three aspects:

With this explanation, perhaps we can understand why Binance Labs invested in Solayer - because Solayer will occupy a very important ecological niche infrastructure of Solana in the future.

Next, let’s briefly talk about Solayer’s competitor Jito and Sanctum which was quite popular some time ago.

In the article Announcing Jito Restaking (https://www.jito.network/zh/blog/announcing-jito-restaking/), although Jito did not mention the focus of its future business, it only talked about some of the advantages of its products. However, in the example of the oracle, we can see that the business focus of Jito Restaking seems to be more like Eigenlayer, providing services (economic security) for cross-chain bridges, oracles or Rollups. This is also the difference between Jito Restaking and Solayer's current business model. These are just my guesses at the moment. I will continue to talk about it in detail after the subsequent content is announced.

Sanctum's narrative is not as grand as Jito and Solayer. What it wants to do is the liquidity layer of LST. Simply put, some small LSTs have insufficient liquidity and cannot be quickly withdrawn through Swap. At this time, Sanctum launched an integrated liquidity layer to provide liquidity support for various LSTs of Solana. In short, Sanctum's product is to solve the current liquidity problem of SOL LST.

Finally, let’s answer the first question: Is Solana Restaking a good business?

From Solayer's perspective, I think this is a good business. Unlike exogenous AVS, in the first phase, Solayer's target customer group is the current Solana ecosystem DApps, and the adoption threshold of Solayer services is low - if there is a demand, DApps can easily use the services provided by Solayer. This is why I think Solayer can quickly establish an ecological moat.

Finally, I would like to make a small advertisement for my paid group. Currently, there are about 450 people in it. It is jointly operated by me and Mantou. I mainly do investment research and fundamentals, and Mantou mainly looks at secondary and on-chain meme related content. We both look at Alpha content. The price is 3SOL/year.

TG Channel (previous market views are shared here): https://t.me/+nFecUZLZhMBlMTc1

Reading list: https://docs.google.com/spreadsheets/d/1JSmI-YDvbdxXJ1Tud2sK8mly33zh1VmcH8i5wUgSYs0/edit?usp=sharing

High-quality CT information flow: https://x.com/i/lists/1795371206344130752

Sector:
SEC Security Token
Solana Ecosystem
Layer 1
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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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