Renzo Protocol is a decentralized finance (DeFi) protocol that provides users with a seamless gateway to liquid restaking within Ethereum’s ecosystem. It enables holders of ETH and liquid staking tokens (LSTs) to convert their assets into the ezETH liquid restaking token (LRT) and earn additional yield while helping extend Ethereum’s cryptoeconomic security to solutions that otherwise couldn’t take advantage of it.

To date, Renzo Protocol has successfully secured $3.2 million in seed funding. This investment paves the way for the liquid restaking protocol’s future growth and the recent launch of the project’s native REZ token.

Key Takeaways

  • Renzo Protocol is a liquid restaking protocol that leverages EigenLayer’s infrastructure to restake ETH and liquid staking tokens (LSTs) to secure Actively Validated Services (AVSs) and earn additional yield for stakers.
  • Renzo allows users to restake ETH and LSTs via its liquid restaking token (LRT) called ezETH, which offers restaking across six different blockchains.
  • The project has raised $3.2 million in seed funding from investors and has recently launched its native REZ token to reward ezETH restakers and decentralized governance.

What Makes Renzo Protocol Unique?

Renzo Protocol in a nutshell
Renzo Protocol in a nutshell (source)

Renzo Protocol is a liquid restaking protocol and strategy manager for EigenLayer. Pioneered by EigenLayer, restaking refers to the process of earning additional yield by extending Ethereum’s cryptoeconomic security to products, services, networks, and decentralized applications (dApps) that haven’t been able to benefit from it. The latter solutions are called Actively Validated Services (AVSs).

Currently, users can restake ETH and LSTs via six different blockchains – Ethereum, Arbitrum, BNB Chain, Base, Mode, and Linea (with deployment on X Layer coming soon). When initiating the restaking process, Renzo mints ezETH, a liquid restaking token (LRT) representing the holder’s restaked assets, as well as the accumulated restaking rewards and potential penalties. Simultaneously, holding an LRT like ezETH also grants holders staking yield on top of restaking rewards.

Between March and May 2024, Renzo’s total value locked (TVL) increased significantly, surging from $661 million on March 1 to $3 billion by May 14. With over 350% TVL growth in less than three months, the project has become the second-largest restaking protocol across all dApps.

An Extensive Look Into Renzo Protocol’s Features

Renzo Protocol leverages EigenLayer’s restaking protocol to enhance staking rewards and extend Ethereum’s cryptoeconomic security to AVSs. Here’s a breakdown of its key features and mechanisms:

WorkflowDescription
LRT MintingUsers supply Ethereum (ETH) or Liquid Staking Tokens (LSTs) to Renzo Protocol to mint an equal value of the ezETH liquid restaking token (LRT) to represent the staked assets and the accumulated restaking rewards and potential penalties.
Extending Ethereum’s SecurityRenzo helps secure Actively Validated Services (AVSs) within EigenLayer’s ecosystem, providing an excellent opportunity for ETH and LST holders to earn restaking rewards on top of staking yield.
Accumulating Restaking RewardsOver time, ezETH’s price grows with restaking rewards. Besides yield, ezETH may also incur potential penalties in case of inefficiencies or malicious behavior during the staking process.
ezPoints And EigenLayer PointsBy staking ezETH, users receive a combination of EigenLayer restaked points and Renzo’s ezPoints. EigenLayer points represent the staker’s share in the pool among all restakers to distribute rewards after the protocol’s mainnet launch phase is complete. At the same time, ezPoints are loyalty points Renzo distributes to ezETH restakers, granting holders a part of the REZ token supply.
Community GovernanceWith the launch of the native REZ token, holders can participate in Renzo’s community governance mechanism to shape the protocol’s future.
Renzo Protocol’s key features

What Are the Benefits of the Renzo Protocol’s ezPoints Mechanism?

By restaking ezETH on Renzo Protocol, users can earn ezPoints, which is a loyalty point to incentivize users to restake ETH and LSTs via Renzo. Until recently, ezPoints had no utility, and holders continued to accumulate them without the ability to use them.

But after the launch of the project’s native token in May, restakers can claim REZ proportionally to their earned ezPoints. In Season 1 of the ezPoints Campaign, Renzo has allocated 5% of the total REZ supply to reward ezPoints holders, who can claim their tokens in the application.

To earn ezPoints, users only have to restake ezETH via Renzo. Restakers receive 1 ezPoint per hour after each restaked ezETH.

What Is the REZ Token?

Launched in May 2024, REZ is Renzo Protocol’s native token. With its total supply limited at 10 billion coins, 1.15 billion REZ was minted at genesis.

REZ is a governance token, meaning that its utility is limited to proposing and voting on decisions concerning the future of the project.

REZ’s distribution model includes the following allocations:

  • Fundraising: 31.56%
  • Community: 32%
  • Core Contributors: 20%
  • Foundation: 12.44%
  • Binance Launch Pool: 2.5%
  • Liquidity: 1.5%

How Much Funding Did Renzo Protocol Raise to Date?

Renzo Protocol successfully secured a total of $3.2 million during its initial seed round. Key participants of the investment stage include:

  • Maven11 (Lead Investor)
  • Figment Capital
  • SevenX Ventures
  • IOSG Ventures
  • BODHI Ventures
  • Paper Ventures

Final Thoughts

With liquid restaking, Renzo Protocol allows ETH and LST holders to optimize their earnings by helping extend Ethereum‘s cryptoeconomic security. Leveraging EigenLayer’s restaking mechanism helps improve blockchain security for AVSs and the broader crypto market.

At the same time, Renzo’s successful seed funding round and REZ token launch laid down the foundation for the project’s further growth, as it continues to accumulate TVL in the DeFi sector.

Frequently Asked Questions (FAQ)

How does Renzo Protocol improve blockchain security?

Renzo Protocol enhances blockchain security by leveraging the EigenLayer ecosystem to expand Ethereum’s cryptoeconomic security to Actively Validated Services (AVSs). Offering additional yield on top of staking rewards incentivizes stakers to help secure AVSs.

Is Renzo Protocol compatible with existing blockchain infrastructures?

Yes, Renzo Protocol is currently deployed on six different blockchains: Ethereum, Arbitrum, BNB Chain, Base, Mode, and Linea.

What are Renzo Protocol’s USPs to those of its competitors?

Renzo sets itself apart from other staking protocols by offering:

• Liquid restaking
• A convenient strategy manager for EigenLayer
• The ability for users to receive additional yield by restaking ETH and liquid staking tokens (LSTs)
• Restakers can claim their share of the native REZ token proportional to their earned ezPoints loyalty points

Seasoned crypto, DeFi, NFT and overall web3 content writer with 9+ years of experience. Published in Forbes, Entrepreneur, VentureBeat, IBTimes, CoinTelegraph and Hackernoon.

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