A Deep Dive Into Our Symbiotic Restaking Vault Strategy

Today, we launched five Gauntlet-curated Restaking Vaults on Symbiotic. Our initial Symbiotic vault set aims to maximize the number of network allocations without exposing depositors to excess slashing risk across all preferred collateral options. To accomplish this, we approach each vault by evaluating three major aspects: 

• Network allocation 
• Collateral selection
• Operator onboarding 

To ensure risk is managed beyond the allocation decision, we have instituted both onchain and off-chain controls to enhance monitoring and slashing response. In this post, we summarize our framework for evaluating each risk vertical and how we incorporate this evaluation into our decision-making.

Network allocation methodology

During the launch phase, Gauntlet Symbiotic Vaults will provide economic security for (and earn rewards from) seven networks: 

• mev-commit (Primev) 
• Radius 
• Cycle 
• Ditto 
• Kalypso 
• Bolt
• Capx

Our allocation methodology differs based on whether the network employs a slashing mechanism.

Slashable networks

Slashable networks tend to offer more attractive yields to stakers, but they also introduce a new risk vector with potential loss of staking collateral. As pioneers in DeFi risk curation, our team employs multiple safeguards to minimize slashing risk on our Restaking Vaults, which include:

1. Technical Due Diligence: Before allocating to each additional slashable network, the Gauntlet team conducts extensive technical due diligence on the network’s technical documentation, smart contracts, and the core team.
2. Delegator Hook: All Gauntlet vaults on Symbiotic deploy a built-in safety mechanism called delegator hook. The hook’s primary use is to automatically deallocate from a network in the event of slashing. The hook acts as stop-loss for vault stakers in a catastrophic event (operator offline and/or mass slashing).
3. Onchain Monitoring and Modeling: Our team will leverage an in-house monitoring system to track onchain events, including rewards issuance and potential validator slashing. The system is powered by the Gauntlet’s cutting-edge quantitative models and actively informs our optimal allocation decisions on the risk-reward frontier.

Our curation model for slashable networks employs an optimization technique called “minimax.” This approach minimizes the worst-case loss for our vault stakers in the event of mass slashing.

With slashing a brand new feature on Symbiotic mainnet, we take an incremental approach to our vault’s initial allocations to slashable networks.

Non-slashable networks

With non-slashable networks, we take a risk-adjusted yield-maximizing approach by allocating the maximum amount of vault collateral (up to each network’s limit) to provide shared security to all non-slashable networks.

Collateral choice

Collaterals are the source of economic security for Proof-of-Stake (PoS) networks. With Symbiotic’s mainnet launch, we selected five premium LSTs as collateral for Gauntlet-curated Symbiotic Restaking Vaults: wstETH, cbETH, rETH, swETH, wBETH.

These collateral assets scored high health factors according to our deeply researched restaking collateral evaluation framework.

For example, a critical criterion in our evaluation is abundant market liquidity. Below are the slippage curves of each collateral’s DEX liquidity, with WETH (the top curve) as the benchmark. The CEX issuers of wBETH (Binance) and cbETH (Coinbase) also maintain deep liquidity of their LSTs.

Read our Restaking Collateral Health research blog for the full methodology.

These collateral assets account for over 70% of existing Symbiotic deposits and unlock opportunities to restake with a variety of networks, therefore maximizing capital efficiency and yield.

Operators

Operators serve two primary purposes in our evaluation: 1) efficiently running networks without exposure to additional slashing risk and 2) diversifying depositor risk from unexpected slashing. We aim to onboard operators with a strong track record of high-quality work across existing restaking ecosystems and L1s. Even with this in mind, slashing risk can not be reduced to zero, and spreading allocations across multiple operators reduces the potential downsides from unexpected slashing.

Initial Network Set

Networks with Slashing

mev-commit

Primev is building mev-commit, a credible commitment network used for preconfirmations on Ethereum. Ethereum validators commit staked collateral to participate in the mev-commit protocol. In return, they receive additional proposer rewards from mev-commit.

Within the first few vault epochs, we will allocate a small portion of ETH from each Gauntlet vault to secure Primev. Based on each vault’s stake growth and real-time data on rewards and slashing risk, we plan to adjust this allocation over time.

Networks without Slashing

Radius

Radius is building Lighthouse, a network that connects rollups with searchers to capture MEV opportunities.

Cycle

Cycle Network constructs chain abstraction infrastructure through verifiable state aggregation and combines the Omni State Channel Indexer (OSCI) with a decentralized aggregated sequencer to realize global state proof of trustless state changes across blockchain networks.

Ditto

Ditto Network leverages Symbiotic's shared security to create a trustless actively validated keeper network that executes event-driven workflows with economic guarantees

Kalypso

Kalypso is a ZK proof marketplace that connects users, apps and protocols requiring ZK proofs with hardware providers that can generate them.

Bolt

Bolt protocol enables sub-second transaction preconfirmations by communicating directly with Ethereum block proposers.

Capx AI‍

Capx Network is built on Symbiotic and matches AI agents with the resources they need in real-time, aiming for optimal performance and cost efficiency.