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What is Renzo Protocol? The Liquid Restaking Primitive Explained

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What is Renzo Protocol? The Liquid Restaking Primitive Explained

Ethereum’s network has been the home of many narratives throughout the years, and liquid restaking is undoubtedly one to look into.

You might be confused by the term liquid restaking, and that’s completely understandable. After all, another popular narrative is centered around liquid staking.

Before we dive into the intricacies of the Renzo Protocol, which is the ultimate purpose of this guide, it’s essential to understand a few fundamental principles first.

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What’s the difference between Liquid Staking and Liquid Restaking?

Let’s keep it simple. Both of these involve some sort of staking, which is the process of taking your tokens (we will use ETH as an example throughout the entire guide) and locking them within a protocol to serve a certain purpose. For this, you will receive a reward (in the form of interest).

Liquid Staking Tokens (LST)

Liquid staking is a process where you stake your ETH in protocols, which in turn mint a synthetic representation of your ETH – that’s called a liquid staking token (LST). The purpose of your ETH, however, is always to increase the economic security of Ethereum. It’s staked to validate and secure the Ethereum network. The term “liquid” comes from the fact that the synthetic asset that you receive can then be used in various DeFi initiatives that you find fit.

The base protocol here is Ethereum, and there are different LST protocols such as Rocket Pool, Lido, Binance ETH, Mantle ETH, and so forth.

Liquid Restaking Tokens (LRT)

With liquid restaking, the purpose of your staked ETH is to increase the economic security of external systems. These can be Oracle networks, Rollups, and whatnot. So, you will still stake your ETH within a certain protocol, and you will once again receive a synthetic representation of your tokens called a liquid restaking token (LRT), but the purpose is different.

The base protocol here is EigenLayer. Some of the top LRT protocols include Renzo, Eigenpie, Kelp DAO, Puffer, ether.fi, and others.

Important note: both LSTs and LRTs are pegged to ETH in a 1:1 manner, and you should always be able to redeem your synthetic tokens for the ETH you’ve staked.

Here’s a table to visualize the above:

Source: CryptoPotato

What is EigenLayer?

Now that you know what LRTs are, let’s quickly explain the role of EigenLayer in all this. This is important for our guide because Renzo Protocol is essentially a Liquid Restaking Token and a strategy manager for EigenLayer. Don’t worry. It will make more sense in a moment.

EigenLayer is a protocol that’s built on Ethereum, and it was the first to introduce restaking as a primitive. Through that protocol, users are able to repurpose their ETH on the consensus layer. They are now able to opt-in to EigenLayer smart contracts and restake their ETH to increase the crypto-economic security of other applications on the network.

It’s essentially a middle layer where users agree to grant EigenLayer more enforcement rights on their staked ETH. This then allows the protocol to restake the ETH on other applications.

These applications can be rollups, oracle chains, or pretty much any application that is based on similar cryptoeconomic principles. They are called Actively Validated Services (AVS). These are very important to understand the purpose of the Renzo Protocol.

Understanding Actively Validated Services (AVS)

In essence, an AVS is any system that has a requirement for distributed validation for verification. These can be sidechains, bridges, keeper networks, data availability layers, oracle networks, and so forth.

To put it in very simple terms, your staked ETH is being restaked to secure these AVSs. But since each AVS is different and it might come with inherently variable risk profiles, the rewards are also different (you get rewards for staking and restaking, remember?) So, which AVS should you direct your tokens to, and what’s the best strategy?

This is where the Renzo Protocol comes in.

What is Renzo Protocol?

Renzo is a platform that’s built on EigenLayer and basically serves as an interface to its ecosystem. It uses a combination of operator nodes and smart contracts to make sure that its users get the best risk/reward restaking strategy.

We know this can be quite confusing, so let’s try to break it down even further.

Understanding restaking strategies

Now that you know what EigenLayer is and what LRTs are let’s attempt to simplify even more what Renzo does.

As we already explained, the AVSs in EigenLayer are any sort of decentralized service looking to inherit Ethereum’s security. A restaking strategy is, then, a position where you (the user) decide to secure any of the many available AVSs. You can also make all sorts of combinations. The number of possible strategies, however, increases with the number of available AVSs.

This makes it hard to choose the one which will bring the best risk/reward ratio. This is what Renzo does. It simplifies this process and makes the choice for you, ensuring the best R:R ratio.

Understanding ezETH

ezETH is the Liquid Restaking Token (LRT) of the Renzo Protocol. It represents the user’s restaked position at Renzo.

Users are able to stake native ETH or liquid staking tokens (LSTs), such as wBETH and stETH, and receive ezETH.

An important factor here is that ezETH is a reward-bearing token. As such, its value can increase relative to the underlying tokens, as it yields more rewards because of its usage in AVSs.

Renzo has also integrated with Pendle Finance, where a new token is created through a single contract – EIP5115 SY Token. It represents ezETH at a 1:1 ratio, but it can also be tokenized in principal tokens and yield tokens for those who want to do that.

Restaking with Renzo Protocol: Step-by-Step Guide

Now that you have a fundamental understanding of how the Renzo protocol works, let’s find out how to actually use it in practice.

Step 1: You will need some ETH (or LSTs such as stETH) in your MetaMask wallet.

Step 2: Visit the Renzo Protocol restaking dashboard and connect your wallet.

Step 3: You will be able to choose between the different ecosystems, as well as between native ETH or any other LSTs that are supported. These include wBETH (Binance Staked Ether) and stETH (Lido Staked Ether) for Ethereum.

Step 4: In our case, we will restake native ETH.

Step 5: Enter the amount you wish to stake and hit “Confirm.”

Step 6: Confirm the transaction from the interface.

Step 7: Confirm the transaction from your wallet.

Step 8: Head to the Portfolio tab where you’ll be able to view your earned points and rewards.

And you’re done!

Please note that withdrawals are currently disabled. Users will be able to withdraw their deposited ETH following a so-called cooldown period, to be determined by the team. However, ezETH is traded on secondary markets so you can always swap it on DEXs.

ezPoints: Everything You Need to Know

Renzo’s points (ezPoints) are designed to reward users who actively participate and contribute to the success of the protocol. Every participant receives points but their number varies based on the duration and the nature of this participation.

Holding ezETH, for instance, rewards ezPoints. Every ezETH holder receives 1 Renzo ezPoint per hour per 1 ezETH. Early participation is also rewarded, while users who hold more ezETH receive more points, based on different boosts such as these:

Source: Renzo Protocol

ezPoints determine the number of REZ tokens a user will receive following the token generation event, which brings us to the next point.

The REZ Token in Depth

Imperative to Renzo’s commitment to decentralization is the REZ token – a cryptocurrency that’s designed to power the governance of the protocol.

Utility

REZ is the native governance token for the protocol. Holders of REZ will be able to vote on governance proposals regarding various matters, including but not limited to:

  • Operator whitelisting
  • Actively Validated Services whitelisting
  • Frameworks for general risk management
  • Community and treasury grants
  • Concentration amounts, collateral assets, deposits, etc.

Tokenomics

The total supply of REZ tokens is capped at 10,000,000,000.

The initial circulating supply (listing on April 30th) will be 1,150,000,000.

You can find the contract here.

Token Distribution

Fundraising: 31.56%

  • These tokens are for the project’s early investors.

Community: 32%

  • 7% will be for Season 1 airdrop rewards based on the earned ezPoints.
  • Various community campaigns
  • 5% allocated towards second season of incentives

Core Contributors: 20%

  • Distribution to Renzo Labs’ team and advisors

Foundation: 12.44%

Binance Launchpool: 2.5%

Liquidity: 1.5%

Token Release Schedule

The token release schedule looks like this:

Source: Binance

The Renzo (REZ) Airdrop

The REZ airdrop has been a much-anticipated event for community members who have been farming ezPoints since their announcement.

As stated above, 7% of the total supply will be distributed for Season 1 airdrop rewards based on the user’s earned ezPoints.

Here are the airdrop eligibility criteria:

  1. You need minimum 360 ezPoints per wallet.
  2. Most of the eligible wallets, accounting for over 99% of the total, will be fully unlocked at TGE.
  3. This doesn’t apply to larger wallets. Those who have more than 500,000 ezPoints will see 50% unlocked at TGE and the rest vested linearly over 3 months.

The snapshot date is April 26th, 2024, while the claim date will be on April 30th. The claim window will open an hour before the listing on Binance, which is at 12:00 (UTC).

There will also be a Season 2 with undisclosed dates for now. It will receive 5% of the total supply.

The Team

Lucas Kozinski is part of the founding team at Renzo Protocol. He comes with rich background in the crypto industry, having previously worked at lending and borrowing app Moonwell, TokenSoft, and the Tezos Foundation.

James Coole is another founding contributor at Renzo. He had previously co-founded TokenSoft, where he served as the Chief Technology Officer for five years.

Kratik Lodha is also listed as one of the founding contributors. His background consists of multiple analytic positions in various funds such as the Woodstock Funds, WorldQuant, Equity Research, and others.

Investors

In January 2024, Renzo disclosed a $3.2 million seed round led by Maven11. Other participants included IOSG Ventures, Figment Capital, SevenX Ventures, and more.

According to its official website, investors also include Binance Labs, OKX Ventures, Mantle, Edessa Capital, BODHI Ventures, Robot Ventures, Re7Capital, and others.

Participating in the Binance Launchpool for Renzo Protocol (REZ)

The Binance Launchpool campaign will last until April 30th. Trading will start at 12:00 (UTC).

To participate, you will need a Binance account. If you don’t have one, you can create it using this link. You will also need to complete your KYC verification. The whole process takes no more than a few minutes.

Step 1: Locating the Launchpool Section

Once you have your account prepared, you will need to navigate to the Launchpad & Launchpool section from the top navigation menu (if you’re on Desktop).

renzo_binance_launchpool_1

Step 2: Selecting a Pool

Once there, the Renzo launchpool will appear as the latest one, and you will have to choose which pool you want to join. For REZ, there are two pools:

For the sake of this guide, we will choose the FDUSD Pool. You will be staking FDUSD to receive rewards in REZ.

Click on “Stake.”

Step 3: Staking the Selected Cryptocurrency

You will be taken to a new window, where you will be able to monitor all the information for the pool you’ve selected. This includes total pool rewards, maximum hourly rewards, how many people participate, how much is staked, and so forth. Here, you will also be able to track your rewards and claim once the claiming window opens.

You will once again have to click on “Stake.”

After that, all you need to do is input the amount you wish to stake and, you guessed it, click “Stake” again.

Step 4: Claim Your Rewards When Possible

Rewards are calculated hourly, so once enough time has passed, you will see the claimable amount appear under the “My Rewards” tab on the page. You can claim them, but you will only be able to trade REZ once the listing takes place on April 30th.

That’s a Wrap

Renzo Protocol has managed to attract a lot of attention through its considerable growth in a relatively short period of time. The liquid restaking narrative is also one of the more interesting trends in 2024, with EigenLayer booming in both usage and popularity.

The protocol provides an easy-to-use way to earn a yield on otherwise dormant tokens, but there are also certain risks involved.

While Renzo does what it can to ensure security, it’s also highly advisable for every user to do extensive research, assess their risk profile, and—if needed—even consult with a professional before making any financial decisions.

The above post is powered by Renzo Protocol.



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We are the editorial team of TokenTalk, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on TokenTalk, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

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Binance Burns $971 Million in BNB! Cryptocurrency Explodes!

TokenTalk Staff

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Binance Burns $971 Million in BNB! Cryptocurrency Explodes!

Monday, July 22, 2024 ▪ 3 minute read ▪ by Eddy S.

Binance recently completed its 28th quarterly BNB token burn. This event saw the destruction of 1,643,698.8 BNB tokens, valued at approximately $971 million at the time of the burn. This strategic initiative is part of the cryptocurrency exchange’s ongoing efforts to reduce the total supply of BNB! This increases its scarcity and potentially its value.

Cryptocurrency Burns BNB Binance

Binance: BNB Skyrockets After Recent Crypto Burn!

The concept of crypto burning involves permanently removing a certain number of tokens from circulation. This is done by sending tokens to a burn address, a special wallet from which they can never be retrieved. By reducing the overall supply of BNB, Binance aims to create a deflationary effect, which can drive up the price of the remaining tokens. This practice is a key element of Binance’s long-term strategy to increase the value of BNB and reward its holders.

The recent burn has had a significant impact on the cryptocurrency market. Following the announcement, BNB price increased by 0.5% to $596 and trading volume jumped by 22%. This increase in price and trading activity indicates growing investor confidence in BNB and Binance’s overall strategy. Investors often view token burns as a positive sign, as they demonstrate the company’s commitment to maintaining the value of its native token.

A show of strength for Binance!

The success of these burns highlights Binance’s solid financial health and ability to generate significant profits. The funds used for the burns come from Binance’s profits, underscoring the crypto platform’s strong revenue streams and operational efficiency.

Binance’s latest BNB token burn not only reduced the total supply of BNB, but also boosted investor confidence and cryptocurrency market activity. As Binance continues to run its quarterly burns, the long-term outlook for BNB remains positive! This, with a potential price appreciation and increased investor interest.

Maximize your Cointribune experience with our Read to Earn program! Earn points for every article you read and access exclusive rewards. Sign up now and start earning rewards.

Click here to join “Read to Earn” and turn your passion for cryptocurrencies into rewards!

Eddy S.'s avatarEddy S.'s avatar

Eddy S.

The world is evolving and adapting is the best weapon to survive in this wavy universe. Originally a cryptocurrency community manager, I am interested in everything that is directly or indirectly related to blockchain and its derivatives. To share my experience and promote a field that I am passionate about, there is nothing better than writing informative and relaxed articles.

DISCLAIMER

The views, thoughts and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Do your own research before making any investment decisions.



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5 Million PUSH Circulating Supply Stolen in WazirX Hack, Token Drops 48%

TokenTalk Staff

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5 million of circulating PUSH supply stolen in WazirX hack, token falls 48%

The entire reserve of PUSH tokens held on WazirX was stolen following the recent security breachresulting in the theft of over $230 million in digital assets. The hack, which occurred on July 18, 2024, sent shockwaves through the crypto community and led to a significant drop in the value of the affected tokens.

For Push Protocol, the developer of the PUSH token, the exploitersold 100% of the PUSH token holdings belonging to WazirX users. This massive sell-off contributed to a 48% drop in the value of the PUSH token. The stolen PUSH tokens were traced to an Ethereum address identified by Push Protocol. At press time, PUSH has recovered as much as 23% to $0.099, resulting in a net decline of 34% since yesterday.

Harsh, the founder of Push Protocol, provided exclusive comment to CryptoSlate, stating, “We are currently communicating with the WazirX team to see what the action plan may be,” indicating that efforts are underway to address the situation and potentially mitigate the impact on affected users.

WazirX took immediate action in response to the hack, temporarily suspending all deposits and withdrawals to prevent further losses. The exchange also launched a reward program offering up to $23 million for information leading to the recovery of stolen funds.

ZachXBT has suggested that the cyberattack could be linked to North Korean perpetrators, based on similarities in the types of services used and transactional behaviors observed in previous attacks attributed to North Korean hackers.

Push Protocol has a circulating supply of 60 million tokens. Harsh commented,

“100% of the user reserves on the exploited exchange (Wazirx) have been sold. The remaining 55 million remain with the community and other exchanges, users, investors, etc.”

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Utility Tokens on the Rise: Why Investors Are Abandoning Doge, Shib, and Bonk for Rollblock!

TokenTalk Staff

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Utility Tokens on the Rise: Why Investors Are Abandoning Doge, Shib, and Bonk for Rollblock!

Memecoins are known to be the most unpredictable yet potentially profitable assets. Early investors in Dogecoin (DOGE), Shiba Inu (SHIB) and Bonk (BONK) have been able to enjoy huge net returns.

While some of these still have potential to recover in the next bull cycle, investors are also looking at new, brighter gems. One utility token that has successfully captured investors’ attention is Rolling block (RLBK). It has innovative technology, a unique platform to play and earn, and the potential to make huge profits by the end of 2024.

The Future Looks Uncertain for Dogecoin (DOGE)

Dogecoin (DOGE) has made an impressive comeback amid the long-awaited cryptocurrency market resurgence. It recently surpassed 90 million wallet addresses, reflecting a huge growth in Dogecoin’s user base. Analysts are even seeing the possibility of a super cycle for Dogecoin where it could enter the $1 to $1.50 range.

However, this forecast is very ambitious. Realistically, Dogecoin has only been in the green zone for the past 30 days. Although the memecoin has made a small dip, it seems to be in choppy waters. With an intraday gain of over 3.7%, the future looks very bright for Dogecoin, with some analysts predicting that Dogecoin could rise further in Q3.

Shiba Inu (SHIB) needs huge bullish momentum to keep pace with the market

Over the past 30 days, Shiba Inu (SHIB) has seen a small decline of 0.77%. Things have been tough for Shiba Inu lately, especially after the news of hackers stealing 5.4 trillion Shiba Inu tokens. According to Coinmarketcap, Shiba Inu is currently worth $0.00001783, down 81% from its all-time high.

Shiba Inu can recover now if buyers regain control. Market sentiment has changed positively and trading volume has remained strong. If Shiba Inu manages not to fall further, then the local trend could remain bullish. Unfortunately, analysts suggest that this bullish trend is a short-lived event.

Can Bonk (BONK) Rebound to the Top During This Rally?

Bonk is one of the best performing meme coins ever created. Investors reaped millions of dollars in profits when Bonk’s value soared as much as 7581% in a year. However, things haven’t been the same for Bonk since then.

According to Coinmarketcap, Bonk is currently trading at $0.00003076. This has increased by over 31% in seven days, leading investors to wonder if Bonk is making a comeback. However, with some analysts predicting a sharp decline in the coming weeks, investors should be cautious before committing their money to such a risky asset.

Rollblock (RBLK) Quickly Becomes the Next Big Token

With such uncertain market conditions for memecoins, investors are now shifting their attention to newer alternatives. One such token that is getting all the hype is Rolling block (RBLK). This GambleFi play-to-earn coin offers the best of both worlds to investors: they can safely trade cryptocurrencies while gambling and placing bets!

This highly profitable project introduces a DeFi casino with over 150 game modes. Using blockchain technology, the platform makes it impossible to change bets, giving investors complete peace of mind.

Players earn $RBLK as a reward for playing. Token holders will be granted a share of the platform’s profits, with Rollblock allocating up to 30% of its revenue to a buyback mechanism.

In Phase 4 of its presale alone, Rollblock has already raised as much as $1.2 million, reflecting the huge demand for the token. Compared to other tokens with uncertain growth trajectories, Rollblock is trading at a highly competitive price of $0.017. Before the presale ends, analysts predict that this value will increase by 800%, with a huge rally on the day of release!

Discover the exciting Rollblock (RBLK) pre-sale opportunities now!

Website: https://rollblockpresale.io/

Social: https://linktr.ee/rollblockcasino

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Definition, how it works with cryptocurrency trading

TokenTalk Staff

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Definition, how it works with cryptocurrency trading

What is an atomic swap?

An atomic swap is an exchange of cryptocurrencies from separate blockchains. The idea is to remove centralized intermediaries like exchanges and reduce the steps required to exchange tokens, but many exchanges and companies have created swap solutions to simplify the process.

The term atomic comes from the term “atomic state” where a state has no substates. This refers to a cryptocurrency transaction between two people using different blockchains that either happens or it doesn’t happen, there is no choice.

Most atomic swaps enabled wallets and blockchains use smart contracts. Smart contracts are programs within blockchains that execute when certain conditions are met. In this case, the conditions are that each party accepts the transaction before a timer expires. Using a smart contract in commerce prevents either party from stealing cryptocurrency from the other.

Atomic exchanges are also called Crossed chain atomic exchanges.

Key points

  • An atomic swap is a cryptocurrency exchange between two parties who wish to exchange tokens from different blockchains.
  • Atomic swaps are useful if you only have one cryptocurrency but need to use another in a transaction.
  • To make an atomic swap, special wallets or exchange services are needed, because the technique is still being developed and perfected.

Understanding Atomic Swaps

Each cryptocurrency is backed by a blockchain, which is designed only to accept transactions in specific tokens. For example, the Bitcoin and Ethereum blockchains each have a native token that cannot be transferred to the other. You must first convert them into fiat currency and then purchase the other using other cryptocurrencies and exchanges to get what you want. Depending on the cryptocurrency, this can take several transactions. Atomic swaps allow you to exchange tokens from different blockchains in one transaction.

Some decentralized exchanges can do atomic swaps for you. A decentralized exchange (DEX) has no central authority regulating it; it is a platform where you can trade without a third party. You can also choose from cross-chain swap providers, where you transfer your digital assets into another wallet, do the swap, and transfer them back out.

Atomic exchanges rely on each party providing proof via key cryptography and acceptance by both parties via the encrypted key.

History of Atomic Exchanges

The concept was conceived shortly after the materialization of altcoins, cryptocurrencies other than Bitcoin. The creation of altcoins caused some cryptocurrency holders to become interested in moving capital between coins. This type of token swap first appeared in September 2017, when an atomic swap was conducted between Decred and Litecoin.

Since then, startups and decentralized exchanges have created ways to facilitate swaps and have given users the same ability. For example, Lightning Labs, a startup that created the Lightning Network for Bitcoin transactions, has conducted off-chain swaps using the technology.

Special cryptocurrency wallets have also been developed that can perform cross-chain atomic swaps: Liquality has developed a wallet that allows you to trade Bitcoin, ETH and more, connecting to swap providers such as 1inch, Jupiter and Sovryn.

Atomic exchange process

In an atomic swap, two token holders agree to exchange their tokens. A smart contract is programmed to lock both token holders’ tokens and redeem them for the desired tokens. For example, if Alice wanted to exchange one bitcoin (BTC) for an equal amount of Bob’s monero (XMR), the smart contract would lock both amounts on their respective blockchains. Once Alice and Bob agree to the exchange, the smart contract would redeem Bob’s BTC on the Bitcoin network and Alice’s XMR on the Monero network.

Atomic exchanges use Hash Timelock Contracts (HTLC) to automate the exchange of tokens. As the name suggests, HTLC is a time-limited smart contract between parties that involves generating a cryptographic hash on each end.

A cryptographic hash function is an algorithm that converts variable-length data, such as a person’s wallet address and transaction information. It converts them into a hexadecimal number with a fixed length. In general, the number that is generated is called a hash.

HTLC requires both parties to acknowledge receipt of funds within a specified time frame. If one party fails to confirm the transaction within the time frame, the entire transaction is canceled and the funds are not transferred. This eliminates Counterparty riskor the risk that one party will accept the offered coins and refuse the transfer of their own coins.

How to do an atomic swap

Atomic Swaps sound complicated, but for most users they can be very simple. Atomic Swap enabled wallets or decentralized exchanges like Atomic Swap or Uniswap allow you to choose between your cryptocurrency to exchange for another token. The swap may be labeled “Exchange” or “Swap” in the wallet interface.

Once you have selected the appropriate action, choose the tokens you want to exchange; you will see the amount you will receive in the token you are exchanging. The interface should tell you the exchange rate and network fees, have you review the transaction, and give you a button to press to initiate the exchange.

Depending on the network, whether you are using an exchange or trading with another user, the swap may take several minutes to complete. For example, Atomic Wallet instructions state that a swap should take about 20 minutes, but other decentralized wallets or exchanges may take less or more time.

What is the atomic exchange mechanism?

Atomic swaps are typically initiated by users and executed by a smart contract. The smart contract can be programmed in many ways, but most tend to lock up the swapped tokens or burn them, then issue new tokens to the swappers.

What are the advantages of Atomic Swaps?

When two entities want to exchange tokens, they can use an atomic swap to ensure that no third parties are involved. This technique is faster and generally cheaper than going through exchanges or other token exchange service providers.

Is an atomic swap anonymous?

In most cases, the only information publicly available is token amounts and users’ public addresses. However, if other information is made available, these addresses can be traced back to their owners, so they are realistically pseudonymous.

The bottom line

The term atomic swap is used to refer to two users exchanging tokens from incompatible blockchains. Swaps are typically executed by smart contracts, which freeze or burn the original tokens and issue new ones on the corresponding blockchains.

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