ArkStream Capital: Challenges and Opportunities in the Restaking Narrative
Date: 24th May 2024, 2:30 PM UTC
Host: @ark_stream @ViabtcCapital
Co-Host: @BSCNews @OdailyChina @JinseFinance
Guests: @bounce_bit @puffer_finance @ether_fi @KelpDAO
The meeting on “Challenges and Opportunities in the Restaking Narrative,” held on May 24, 2024, brought together key industry leaders from ArkStream Capital, ViaBTC Capital, KelpDAO, Puffer, BounceBit, and ether.fi. Participants discussed strategies for attracting Total Value Locked (TVL), the future of the restaking market, and the competitive advantages of their respective protocols. The conversation also covered BTC/ETH restaking strategies, risk management, and upcoming innovations within the industry. This discussion provided valuable insights into the evolving landscape of the restaking ecosystem and highlighted the collaborative efforts driving its growth.
Host Chung | Investment Partner of ArkStream Capital
l Could you start with a brief introduction of yourself, and then we can do a quick round table to get things started?
Amit | Co-Founder of KelpDAO
l Certainly. Thanks for the invitation. Hello everyone. I’m Amit, one of the co-founders of KelpDAO. KelpDAO is a leading liquid restaking protocol with nearly $1 billion in TVL. We offer comprehensive liquid restaking services using LSDs and native ETH as collateral. Users can stake with KelpDAO and mint RSC. We have over 50 DeFi integrations and support restaking across more than 10 L2s, including Arbitrum, Base, Blast, and Linea. Excited to chat today.
Joe | Head of Asia Market from BounceBit
l Hi everyone. I’m Joe from BounceBit, Director of the Asian market. BounceBit is building the BTC repledge infrastructure to provide a base layer for different repledge products, and is underpinned by the regulatory custody of Mainnet Digital and Ceffu. BounceBit Chain is designed as a showcase for remortgaged products in the BounceBit ecosystem and is a PoS tier 1, It is secured by the verifier pledging BTC and BounceBit’s native tokens — a dual token system that takes advantage of native Bitcoin security and is fully EVM-compatible. Key ecosystem infrastructure such as cross-chain Bridges and prophecy machines are protected by remortgaged BTC. Through the innovative CeFi + DeFi framework, BounceBit enables BTC holders to earn revenue across multiple networks.
Amir | Founding Contributor from Puffer
l Thank you for having us. I’m Amir, a founding contributor at Puffer. We are the first and only permissionless native liquid restaking protocol. Our ETH nodes are operated by a permissionless validator set, ensuring full decentralization and higher security. We recently announced the soft launch of Chapter 4. Excited to join the discussion today.
Lilia | Head of Investment from ViaBTC
l Hi everyone, this is Lilia from ViaBTC Capital, the investment arm of VB Group. Our group has four main businesses: a top 3 ranked Bitcoin mining pool, CoinX exchange, on-chain wallets, and publishing. We’re also LPs of Pantera Capital, a16z, Sequoia, and MetaWeb. We invest in infrastructure, DeFi, SocialFi, GameFi, and recently AI.
Host Chung | Investment Partner of ArkStream Capital
l Could you share your strategies for attracting TVLs and your thoughts on the market? Do you think one restaking protocol might dominate the industry?
Amit | Co-Founder of KelpDAO
l Thanks Chung. The space has grown significantly, with many protocols reaching close to or over a billion in TVL. I believe there’s room for several dominant players. What matters are liquidity, DeFi integrations, and distribution, which are our main focuses. A major advantage of KelpDAO is that we are a full-suite protocol, accepting both LSTs and native ETH, giving us flexibility to redelegate to other restaking solutions and act as a capital router to find optimal yields.
Amir | Founding Contributor from Puffer
l Sure. At Puffer, our biggest differentiator is our focus on permissionless and decentralized operations, providing higher security guarantees. This design involved extensive research and collaboration with the Ethereum Foundation. Our protocol operates fully on-chain, ensuring transparency. Integration with DeFi protocols for liquid restaking tokens is also a key focus.
Host Chung | Investment Partner of ArkStream Capital
l Thanks, Amir. Puffer is well-positioned as a tech leader with your key management and node operations. What are your thoughts on the TVL game? Do you think high TVL will lead to dominance for one entity?
Amir | Founding Contributor from Puffer
l The restaking landscape has enough diversity and complexity to support various players. TVL is important for user acquisition, but long-term success depends on user preferences over time. It’s too early to judge how current LRTs will handle future challenges.
Host Chung | Investment Partner of ArkStream Capital
l Absolutely. TVL is crucial. Rok from ether.fi, what is your competitive edge and strategy for attracting TVL? Also, what do you think about the future of the TVL game?
Rok Kopp | Co-Founder of ether.fi
l Thanks for having us. Restaking is just starting to move beyond being a points farm. Our differentiation at ether.fi is in our products: Ether.fi Cash, Ether.fi Stake, and Ether.fi Liquid. We aim to be the go-to place for those who are long on ETH. Multiple players in the space are beneficial, fostering competition and efficiency.
Host Chung | Investment Partner of ArkStream Capital
l Congrats on the ether.fi Cash launch; the community feedback has been positive. Joe, I’d like to understand how BounceBit contributes to restaking mechanisms for Bitcoin. What yields can users expect and how sustainable are they?
Joe | Head of Asia Market from BounceBit
l BounceBit adapts Bitcoin’s POW system to offer staking-like yields by leveraging trading strategies. Recent market conditions have resulted in 2–3% APY, peaking at 5%. We provide higher yields not currently available in the market. This approach should attract more stakers seeking interest on their holdings.
Host Chung | Investment Partner of ArkStream Capital
l Absolutely. How do you each choose AVS to allocate Ethereum in your TVL? Amit, could you go first?
Amit | Co-Founder of KelpDAO
l Currently, Eigenlayer doesn’t impose slashing on any AVS, so we delegate most LSTs and ETH this way. We evaluate risks based on additional APY versus risk, security aspects, and the reputation of the AV’s founders and investors. Our community will vote on our delegation strategy.
Host Chung | Investment Partner of ArkStream Capital
l Amir, could you share your thoughts on delegating Ethereum in TVL and quantifying returns from AVS?
Amir | Founding Contributor from Puffer
l Eigenlayer lacks standardization, which is a challenge. Many AVS haven’t defined their slashing conditions yet. Our delegation decisions involve researching slashing conditions, demand, and adherence to our risk parameters.
Host Chung | Investment Partner of ArkStream Capital
l Rok, how do you choose AVS to allocate Ethereum in your TVL and quantify returns?
Rok Kopp | Co-Founder of ether.fi
l We’re collaborating with Gauntlet on risk assessments. The restaking world is transitioning from points farming to more substantial restaking. Our approach is to prioritize safety while ensuring good rewards for users.
Host Chung | Investment Partner of ArkStream Capital
l Joe, in the Bitcoin restaking system, do you have a demand side similar to AVS?
Joe | Head of Asia Market from BounceBit
l We don’t have AVS live yet, but we have different validators joining us as Bitcoin beneficiaries. We aim to provide high yields and fair returns for everyone involved in the staking mechanism.
Host Chung | Investment Partner of ArkStream Capital
l Amir, I know you need to leave soon. Could you share some exciting updates from Puffer for the next one to two months?
Amir | Founding Contributor from Puffer
l We’re lowering the barrier to entry for running a Perfect node, introducing new architectures, and enhancing anti-slashing measures. We’re also moving towards validator registration on Layer 2 and implementing community governance with smart contracts.
Host Chung | Investment Partner of ArkStream Capital
l Thanks, Amir. Amit, could you share what KelpDAO is working on that people should be excited about?
Amit | Co-Founder of KelpDAO
l We’re working on distribution partnerships across wallets and enabling native staking across multiple L2s. We’re also planning to build infrastructure across multiple L1s, which we’ll unveil soon.
Host Chung | Investment Partner of ArkStream Capital
l Rok, what exciting things can people expect in the near term from ether.fi?
Rok Kopp | Co-Founder of ether.fi
l We have five weeks left in Season 2, giving away 5% of our token on June 30th. Ether.fi Cash and Ether.fi Liquid are exciting products. We’re also considering a Season 3 and collaborations with other protocols.
Host Chung | Investment Partner of ArkStream Capital
l Joe, what is the next move for BounceBit? How can retail users get more involved?
Joe | Head of Asia Market from BounceBit
l We’re building more products based on our protocol. Users can get nearly 20% yield by staking BB with us. We’re targeting high-value partners to build a higher revenue model and succeed together.
ArkStream capital was established in 2020, which is a well known crypto-native venture capital firm focusing on appeal Alpha strategy with $80 million under management Crossover Hundred portfolios.The arkstream management team boosts the average of 7 years experience in the crypto sectors. With the backgrounds of prestigious institutions and companies such as Stanford, MIT, Google, Evs and Blackrock, the team has been collaborating since 2017, long before arkstream was beauty, which makes it one of the selected 1% of crypto-native teams that thrived since 2017.
Website: https://arkstream.capital/
Medium: https://arkstreamcapital.medium.com/
Twitter: https://twitter.com/ark_stream
