AutoLayer Explained: Restaking Marketplace

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1. Introduction
2. Autolayer Review
3. AutoLayer Architecture and Components
4. Tokenomics and Metrics
5. Team
6. Partnerships and Integrations
7. Backers
8. Conclusion

1. Introduction

There are currently numerous restaking protocols and layers built on top of them, from EigenLayer, Babylon, and similar solutions to Symbiotic, Puffer, Swell, Kelp, and add-ons/extensions such as like Mellow, Gearbox, Lyra, and Anzen. As LRTFi evolves, the number of niche protocols grows, making it increasingly complex for users to navigate the multitude of differences between various protocols and restaking mechanisms. The restaking landscape has already developed into a multi-layered structure, a significant departure from the earlier state of LSDFi.

AutoLayer is the largest marketplace for prestaking, integrated with EigenLayer, Symbiotic, Renzo Protocol, and others. It offers over 20 different assets, including restaking options for Bitcoin and Ethereum. With its advanced risk-reward analytics, point management, and structured products, AutoLayer enables users to leverage multiple LRT/LST options with just one click, maximizing and complicating their yield strategies simultaneously.

2. Autolayer Review

In essence, AutoLayer is a continuation of Tortle Ninja — a visual programming language for DeFi that allows anyone to easily create and understand DeFi products. Tortle Ninja provides users with an advanced experience in algorithmic DeFi trading, enabling them to execute spot and derivatives strategies, measure their performance with real-time data, and quickly adapt to constantly changing market conditions.

In AutoLayer, Tortle Ninja's mechanics are adapted for products and strategies related to restaking. As a restaking protocol aggregator, AutoLayer offers several key features:

• Liquidity redistribution and one-click liquidity allocation – This allows users to restake any token in a single transaction. Users can earn ETH staking rewards, EigenLayer points, LRT points, restaking rewards, and AutoLayer points with just one click, starting with any asset.

• Analytical engine – It calculates all the incentives and key performance indicators (KPIs) generated by the user.

• Risk structure – In addition to rewards, AutoLayer provides a comprehensive LRT risk assessment. We are currently focusing on depeg risks, calculating in real-time the amount of LRT used as collateral in decentralized applications like Aave, Gearbox, Morpho, and Prisma, and comparing it to DEX liquidity and contracts to be liquidated. This data allows us to analyze the potential for liquidation cascades, giving users critical information about their exposure to these risks.

• AVS evaluation – Restaking assets are placed on AVS. For each AVS on AutoLayer, a risk assessment will be created based on two metrics: professional operators' TVL and community TVL.

• Redistribution strategies – LST and LRT can be used in DeFi, and issuers can reward those who utilize them. AutoLayer users will be able to execute these strategies easily with a single click, without needing permission. Users will also be able to evaluate their position over time and exchange it for any asset they want, by reintegrating their receipts (LP positions, NFTs, etc.) back into the interface.

Currently, AutoLayer operates on multiple chains, including Ethereum, Arbitrum, and BNB Chain. More chains are planned to be added in the future (more details in the "Partnerships and Integrations" section).

It is worth noting that AutoLayer does not abandon the DeFi-centric legacy of Tortle Ninja, offering users strategies tied to DeFi. These strategies are powered by Balancer and Camelot pools.

Additionally, AutoLayer has introduced a consistent development strategy leading up to v1.5 and v2. In v1.5, the plan includes expanding beyond EigenLayer-based restaking protocols and launching native structured products (the first of which is the integration with BNB Chain). Version 2 will bring a broader range of updates, including virtual operators and vaults, AVS storage managers, mechanisms for scoring AVS and LRT, compounding and liquification, LRT rehypothecation, slashing tests, and bounties.

As part of further development, as well as improving user experience and yields, AutoLayer plans to introduce a new feature called Stripped Liquid Restaked Tokens (SLRT). To achieve this, liquidity pools will be created in Balancer containing a mix of all wrapped points, and the wrapped points in the pool will be tradable on the open market. Off-chain point representations will be stored in vaults, which in turn will allow the minting of SLRT. These SLRTs enable users to claim a specific amount of points and are on-chain representations of points. Each claim mints one SLRT and allows burning them, with a 1:1 ratio between points and SLRTs. Additionally, AutoLayer plans to create Balancer pools with liquidity for wrapped points to ensure their liquidity.

3. AutoLayer Architecture and Components

As a multifunctional protocol, AutoLayer consists of several components:

• Dashboard, which is the frontend interface and includes three products: Click Liquid Staking/Restaking, Staking/Restaking Strategies, and DeFi Strategies (as mentioned above).

• The Composer is the component that enables AutoLayer to create protocol abstractions. It is an advanced tool designed for building DeFi strategies and workflows, providing a graphical interface for interacting with multiple DeFi protocols. The platform supports complex operations involving various financial instruments, including but not limited to DEX swaps, LSTfi, LRTfi, LPs, leveraged positions, yield farms, and a range of structured products and derivatives.

  The integrated logic layer is a key aspect of the composer. This layer provides programmable automation capabilities, allowing users to define and implement conditional logic and rule-based strategies.

• The Analytics Engine manages over 800 different assets from various protocols, collecting data from RPC, Chainlink Oracles, and blockchain. It offers a fast and reliable system for real-time asset valuation, covering tokens, LST, RST, LP positions, NFTs, vault shares, leveraged positions, and any combination thereof. This microservices-based engine optimizes RPC, oracle, and blockchain calls to provide scalable, accurate, and fast market data.

• The Execution Engine facilitates the implementation of various on-chain strategies. It initiates, halts, merges, and splits transactions to ease the integration of composite and non-composite projects within AutoLayer. Whenever an operation is required, a swarm of subprocesses is activated. The execution engine’s flexibility in managing transactions is a standout feature. It not only consolidates transactions but can also intelligently trigger and stop operations. This is particularly useful for integrating non-composite services and controlling slippage during large order executions. For example, it can create vaults on top of farming platforms or accumulate illiquid tokens and automatically swap them for liquid versions for auto-completion.

• Solvers are consulted by AutoLayer to get quotes from all decentralized exchanges (DEXs), bridges, and LRTfi operators, optimizing operations in terms of slippage and gas costs.

4. Tokenomics and Metrics

The AutoLayer token plays a crucial role in the protocol’s ecosystem, and its value increases as the user base grows. Currently, there are no transaction fees, but the platform plans to introduce a fee ranging from 0.05% to 0.20% for all transactions conducted via AutoLayer.

If a user chooses to lock tokens for yield, there will be a 30-day lock period, after which rewards will accrue over 12 months, during which users can withdraw their tokens at any time.

Total supply: 30 million tokens, Initial Circulating Supply: 2,386,880 tokens

• 20% - Community: 6-year vesting. Airdrops will be distributed based on community milestones, which will be triggered by goals achieved by the community. Community milestones are tied to the maturity of AutoLayer and will initially be defined by the AutoLayer team, later transitioning to community governance.

• 25% - Ecosystem: This portion of LAY3R will be allocated to strategic participants in AutoLayer’s broader ecosystem, including community organizations, developer community growth initiatives, strategic participants, etc.

• 18.2% - Seed Round: Less than 7% of this allocation will be released at the TGE (Token Generation Event).

• 5.38% - Public Round: This will be held across multiple launchpads, such as Poolz, Ape Terminal, and MagicSquare Launchpads.

• 10% - Liquidity Provision: To ensure liquidity across various decentralized exchanges, incentivizing price discovery and liquidity within the DeFi ecosystem.

• 7.38% - Treasury: For supporting initiatives, developer grant allocations, and funding operational expenses.

• 4% - Strategic Advisors

• 10% - AutoLayer Team

5. Team

The team behind AutoLayer consists of 14 people, divided into three departments: six developers, two in strategy and operations, and six in marketing and design. AutoLayer is a division of Glue Digital, a software development consulting firm specializing in cryptography, fintech, and security.

• Javier B. Thomas, CEO: Javier studied Physics and Information Technology at the Universidad Complutense de Madrid (UCM). His career spans key roles at Havas Media, MPG, and Aegis. In 2011, he founded Glue Digital, a bootstrapped company that has grown to 35 employees, generating an annual recurring revenue (ARR) of €2.5 million, with impressive year-over-year growth rates of 50 to 90%. At Glue Digital, Javier has been instrumental in coordinating the team and developing software used in cryptography, security, and financial technology, impacting millions of users. His clients include major organizations like Inditex (Zara), Securitas, eBay/PayPal, AXA, and various European institutions.

• Anxo Soto, CTO: Anxo is a computer engineer who graduated from the Universidade da Coruña (UdC). Since 2014, he has served as the CTO of Glue Digital, where he helped scale the company from 5 to 35 employees. During his university years, Anxo developed an optimized PHP version of the Arthur Scherbius Enigma Machine for his final thesis, though it was rejected by professors. He later recreated it with a simpler idea. Anxo has been working with Javier ever since. He is the creator of Universal Scripts, a popular React framework, and Oxoauth, along with numerous cryptography and security projects that have been adopted by companies like Carrefour, Securitas, and PayPal.

6. Partnerships and Integrations

As an aggregator, AutoLayer naturally integrates with various projects involved in its strategies. This includes tokens from projects such as Swell (swBTC), Renzo (pzETH), Kelp (rsETH), Ether.fi (weETH), Puffer (pufETH), Bedrock (uniETH), and Inception (inETH).

In the upcoming V2 release, which will feature support for multiple restaking protocols, AutoLayer is already working with Symbiotic, Karak, Kernel, and Nektar. Additionally, partnerships with AVS projects like Lagrange, Automata, Witness Chain, OpenLayer, Arpa Network, and Brevis Chain are already in place.

• Paraswap: AutoLayer has integrated Paraswap v5's swap mechanism, enhancing liquidity routing and giving users access to the deepest and most efficient liquidity on the market.

• Balancer: Integration with Balancer enabled AutoLayer to offer its first line of DeFi strategies, giving users more ways to generate yield. Balancer provides a broad range of LRT pools, allowing users to provide liquidity with a single click. Yield is generated through swap fees, bolstered by AutoLayer's additional point-based incentives.

• Everclear: Everclear coordinates global cross-chain liquidity settlement, addressing the fragmentation of modular blockchains with a particular focus on restaking. Users can trade or mint tokens via the Everclear interface across chains such as BNB Chain, Arbitrum, Mode, Polygon, Gnosis, OP, Linea, Metis, and Base.

7. Backers 

AutoLayer has Backers with $2.5M in commitments such as Dewhales Capital, Morningstar Ventures, KuCoin Labs, Staked VC, Poolz Ventures, Spark Capital and others.

8. Conclusion

Last year, we had high hopes for the growth of the LSDFi sector. However, a much more rapid expansion took place in a different area—LRTFi, revolving around restaking. It's evident that the evolution of anything liquidity-related often leads to the emergence of auxiliary protocols like AutoLayer, which focus on maximizing yield and enhancing user experience (much like Napier). The most surprising aspect is that AutoLayer is not just an aggregator for LRT points; it's a complex, multi-component protocol that has evolved from another intricate DeFi product. And the evolutionary development of AutoLayer does not stop - the team is constantly adding some new things and integrations.

AutoLayer links

Website | Twitter | Discord | Documentation | Medium | GitHub

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