Binance Labs invests in EigenLayer’s liquidity recovery service Renzo
Crypto venture capital firm Binance Labs has announced its investment in Renzo, the EigenLayer ecosystem interface.
In the year Binance's investment at the start is not disclosed.
Renzo provides Ethereum smart contracts that facilitate communication between stakeholders, node operators and enabled authentication services (AVSs). In other words, it allows users to re-capture assets, hand them over to node operators and link them through on-chain service modules, the company said.
An active authentication service can be a protocol or service in the EigenLayer ecosystem, which is based on Ethereum's authentication stake model but has its own semantics. Similar to Ethereum, AVS offer token rewards to attract users and node operators. The protocol claims to yield higher yields than Ether (ETH) reserves.
1/ Renzo, @eigenlayer Liquid Retaking Hub, $3.2m seed round led by @Maven11Capital with @FigmentCapital @SevenXVentures @IOSGVC @bodhi_ventures @OKX_Ventures @0xMantleEco @robotventures @ProssapY .com/5XOuqIve2z
— Renzo (@RenzoProtocol) January 15, 2024
Related: DeFi staking: A beginner's guide to proof-of-stake (PoS) coins
The redemption process involves depositing ETH or Liquid Staking Tokens (LST) as stETH. In exchange, users will receive ezETH, the equivalent of the liquid redo token that represents the recaptured position on Renzo.
For users, risks are similar to those already offered in stock services, such as exposure to smart contract vulnerabilities, management risks and the risk of loss due to price fluctuations of underlying assets, making it unsuitable for investors with low risk tolerance.
Binance's move to Renzo comes on the same day that VC firm Andreessen Horowitz (a16z) announced another $100 million in funding for EigenLayer. According to a Bloomberg report, a16z was the only investor in this round. Last March, the protocol completed a $50-million round of funding led by Blockchain Capital.
EigenLayer is now Ethereum's third-largest protocol, with a total value locked in at $7.91 billion, a 347% increase from last month, according to Defillama data.
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