Our market vision

Byzantine Finance aggregates and simplifies access to a wide diversity of restaking protocols. Of course, this rests on the assumption that restaking is not a winner-takes-all space. Here’s why that’s the case.

Insight #1: Restaking yields on a protocol depend on AVS usefulness

In restaking, like anywhere in life, everyone chases yield.

Restakers restake to earn financial returns from AVSs. AVSs pay these returns (either in Ethereum or their native token), which will hold a value that relates to their (either real or perceived) potential to have some use for the market.

From an economic theory perspective, returns, at least in the medium- and long-term, are derived from a service’s utilisation, which in turn depends on its usefulness. A new chain / currency for example gains and yields more value when more people use it, which happens if fees are low. In this case, more scalability = more usefulness = more returns.

We can conclude that the return earned through restaking depends on the usefulness of AVSs. In short, restaked capital will be attracted to protocols where more useful AVSs are present.

Insight #2: One restaking protocol is not enough

So, where are the useful AVSs? We know that AVSs can be extremely varied in nature - from chains to oracles or frankly anything else that requires decentralised computation. We know furthermore that those types of applications can vary widely in their needs. Chains require fast communication, zk apps require large amounts of computation, etc.

Therefore, it is unlikely that one restaking protocol will be able to satisfy them all. Rather quickly, we will see restaking protocol specialisation in the market.

This is further validated by the fact that a series of EigenLayer competitors are already in development - many of them targeting specific AVS niches.

Conclusion: Why we should exist

Overall, restaking fundamentally cannot be a winner takes all space - no single entity can effectively cater to the needs of all AVSs, who are the original drivers of market value and thus yield.

That’s quite problematic for platforms (exchanges, wallets, custodians, etc.) that want to offer to their users the ability to invest in a variety of restaking protocols and chains, because these platforms would have to build individual integrations with all the restaking base protocols individually. This difficulty is compounded by the fact that a) restaking protocols can have highly diverse architecture, meaning integration expertise from one doesn’t apply to the next, and b) their documentations are often still in development or incomplete, requiring painstaking work of either figuring it out or getting directly in touch with their tech team.

All that is not only expensive to do for each individual player, but also highly inefficient from a macro-perspective: These players are effectively duplicating the work of building infrastructure connecting them to restaking, when in fact those same connections could apply to all platforms.

To solve this, there would have to be some kind of organisation that aggregates all these restaking integrations and offers easy access to each platform looking to build on them. This is what Byzantine does.