Cryptocurrency investment firm Binance Labs has revealed an investment in Renzo, an interface to the EigenLayer ecosystem.
According to the February 22 announcement, Binance Labs joins a group of cryptocurrency investment firms and ecosystems that invested $3.2 million in this start-up’s seed round in January. The value of Binance ‘s investment in the company was not disclosed.
Renzo offers Ethereum-based smart contracts that facilitate communication between stakers, node operators and actively validated services(AVSs). In other words, it allows users to re-stack assets, delegate them to node operators and interact with service modules on the chain, according to the company.
An actively validated service can be a protocol or service in the EigenLayer ecosystem, which is based on Ethereum‘s validation model, but has its own validation semantics. As in Ethereum, AVSs offer token rewards to attract users and node operators. The protocol claims to offer a higher return on investment than putting up Ether.
The restaking process involves depositing ETH or liquid staking tokens (LST), such as stETH. In return, users receive the equivalent of ezETH, a liquid restaking token representing a restaked position in Renzo.
For users, the risks are similar to those already present in staking services, such as exposure to the vulnerability of smart contracts, management risk and the risk of loss due to fluctuations in the price of the underlying asset, making this inappropriate for investors with low risk tolerance.
Binance’ s move toward Renzo came on the same day that venture capital 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 funding round led by Blockchain Capital.
EigenLayer is now the third-largest protocol on Ethereum, holding a total blocked value of $7.91 billion, up 347% from the previous month, according to DefiLlam data.
