Renzo (REZ) is one of the largest liquidity re-staking protocols, designed to provide an easy-to-use interface for the Eigenlayer ecosystem. ETH holders can use Renzo to earn higher returns than simply staking ETH.
The project is also the 53rd project on the cryptocurrency exchange Binance Launchpool. Users can obtain Renzo’s native token REZ through staking between April 24 and 29 (UTC).
So, is Renzo (REZ) worth investing in? What are its future prospects? In this article, we will take a detailed look at the Renzo (REZ) cryptocurrency.
What is Renzo?
Founded in 2023 by James Poole and Lucas Kozinski, Renzo is a liquidity re-staking protocol designed to connect users to the EigenLayer ecosystem. The protocol allows participants to participate more actively in staking, while its role as a strategy manager helps manage the assets staked on EigenLayer.
Compared to simply staking ETH, ETH holders can use Renzo to earn higher returns. Users can deposit ETH or liquid staking tokens (such as Lido's stETH) to receive an equal amount of ezETH tokens.
ezETH is a reward token that reflects rewards earned from decentralized services that use EigenLayer for economic security (in addition to base rewards earned from ETH staking). In the EigenLayer ecosystem, these decentralized services are called AVS (Active Validation Services). The Renzo protocol uses smart contracts and operator nodes to automatically identify re-staking strategies with the best risk-reward ratio on behalf of users.
As of now, Renzo has become the largest liquidity staking protocol, second only to Ether.fi, with its total locked value remaining at around US$3.3 billion.
According to The Block, Renzo raised $3.2 million in seed funding on January 15, led by investment fund Maven11, with a valuation of $25 million. Binance Labs also participated in the project, but the investment amount has not been disclosed.
How Renzo works
The Renzo protocol framework enhances the functionality of the Ethereum network. Its operating mechanisms are as follows:
Deposit and minting: Users deposit Ether (ETH) or Liquid Stake Tokens (LST) into the protocol. Renzo then mints an equal amount of ezETH, representing the staked asset in liquid form.
Securing AVS: The protocol plays a vital role in securing Active Verification Services (AVS) on EigenLayer, allowing users to stake their ETH and secure these services, generating additional rewards beyond traditional staking returns.
Strategy Management: As a strategy manager, Renzo optimizes returns by selecting the most effective AVS portfolio to maximize returns and minimize risks associated with staking.
Yield Generation: The protocol facilitates yield generation for ETH validators and, after AVS is launched, will increase re-staking yields by plugging into these services for Renzo node operators.
Reward Distribution: Rewards generated by staking and protecting AVS are captured by the protocol and reflected in the value of ezETH, providing users with tokens that carry the results of their investment.
Enhanced participation: Renzo introduces mechanisms such as ezPoints and EigenLayer Points to reward users for their active participation and contribution to the success of the protocol.
Governance and Decision Making: Governance structures such as snapshot voting and potential on-chain governance mechanisms are in place to guide policy decisions, including the selection of AVS supported by node operators.
According to the Renzo team, Renzo stands out in the crowded DeFi field because of its unique multi-chain functionality, which allows users to access a wider range of assets and services across multiple blockchain environments. This interoperability facilitates asset transfers and enhances liquidity and connectivity across the entire crypto ecosystem.
What is REZ coin?
$REZ is the utility and governance token of the Renzo protocol.
According to the Binance announcement, REZ tokens will be used to vote on governance proposals related to the Renzo protocol, some of which are critical to the protocol’s operating procedures.
Renzo Code Replacement
Renzo originally used EZ as its currency code, but since there were tokens with the same name on the market, in order to avoid confusion, Binance updated Renzo's code from EZ to REZ after communicating with the Renzo team.
REZ Token Economics
The total supply of REZ is 10 billion, and the initial circulation is 1.05 billion. Its initial token distribution is as follows:
Investors and advisors: 31.56%
DAO Treasury: 20%
Team: 20%
Foundation: 13.44%
Airdrop: 10%
Liquidity: 2.5%
Binance Launchpool: 2.5%
Update: Due to strong community dissatisfaction with Renzo's original token distribution, Renzo updated its token economics on April 25 and increased its total community token allocation from 30% to 32%, and the total airdrop allocation from 10% to 12% (the total supply in the first quarter increased from 5% to 7%, with the additional 2% borne by liquidity and the foundation).
REZ Airdrop
Renzo Season 1 rewards will end on April 26th, and any user who sells their ezETH holdings before this date may not be eligible for the airdrop. Users can claim REZ on May 2nd through claim.renzoprotocol.com.
The community will distribute 500 million REZ (5% of the total) linearly based on the ezPoints accumulated for users. The top 5% of addresses will have 50% of their tokens unlocked immediately, and the rest will be released linearly within 6 months.
Season 2 rewards will start immediately on April 26. In addition, 2% of the Season 1 5% airdrop (i.e. 0.1% of the total token supply) has been allocated to the following NFT communities: Milady Maker and SchizoPosters.
Renzo Airdrop New Rules
According to Renzo’s announcement on April 25, the current airdrop share has been increased to 12%, and the claim date has been changed to 19:00 on April 30.
In addition, the minimum eligibility for the airdrop per wallet is 360 ezPoints, and most airdrop addresses can be fully unlocked after TGE. Wallets with more than 500,000 ezPoints will unlock 50% at TGE, and the rest will be unlocked linearly over 3 months.
Binance Launchpool Lists Renzo
As mentioned above, 2.5% (250 million) of Renzo tokens will be used for Binance Launchpool.
Renzo Future Outlook
Since REZ coin has not yet been launched, it is difficult to predict its future price.
However, restaking is one of the focuses this year, and with its own strength and launch on the Binance exchange, Renzo is likely to gain a place in the DeFi protocol.
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