What is Renzo Protocol?

What is Renzo Protocol?

Renzo is a liquid restaking platform hosted on Ethereum and Solana, supporting EigenLayer, Symbiotic, and Jito Network. Renzo offers products like $ezETH, $pzETH, and $ezSOL with APY yield ranging from 3% to 10%, delivering easy access to restaking.

Key benefits of Renzo include auto-compounding rewards, adequate security via open-source contracts and audits, and multi-chain integrations that strengthens liquidity and lending. Users can maximize rewards effortlessly, without the need for manual intervention.

Renzo currently has $1.68 billion in total value locked, capturing 11% of the liquid restaking tokens (LRTs) sector, just behind Ether.fi. As of late 2024, Renzo is the liquid restaking protocol with the largest network support, spanning 12 chains.

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How Does Renzo Protocol Work?

Renzo Protocol is designed to simplify the complexities of restaking for its users. Here's a quick breakdown of the architecture that supports its operations:

• Deposit and Minting: Users deposit ETH, SOL (soon), or liquid staking derivatives (LSDs), such as stETH or JitoSOL, into Renzo, receiving an equivalent amount of an LRT like ezETH or ezSOL.
• Restaking Strategy: Renzo aggregates deposited assets and allocates them to secure Actively Validated Services (AVSs) on EigenLayer, optimizing yield and risk balance across AVS combinations.
• Automated Management: The platform automatically selects AVS combinations, removing decision complexity from users while maximizing rewards and managing risks.
• Yield Generation: The protocol generates rewards from ETH validators and from AVSs through Renzo Node operators. This boosts the returns on staked assets.
• Validator Network: Renzo uses a distributed validator network run by partners like Figment, P2P.org, and Luganodes to secure Ethereum restaking with strong infrastructure.
• Withdrawal Mechanism: Users withdraw collateral via the WithdrawQueue contract, which includes a buffer and cooldown period for added security and stability.
• Compliance Rules: Renzo prohibits looping (using $ezETH or $EIGEN to generate repeated rewards) to maintain protocol integrity and prevent abuse.

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Renzo Restaking Products

Renzo offers multiple restaking products designed to help users maximize their returns through novel restaking mechanisms. Below, we highlight the top four Renzo products:

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1. ezETH

ezETH is a liquid restaking token that represents a user’s restaked position within the EigenLayer ecosystem. By depositing ETH or LSTs, users receive ezETH, which provides access to Actively Validated Services (AVSs) and both staking and restaking rewards.

With auto-compounding and integrations across DeFi like the most recent with Aave, ezETH offers higher average yields compared to other products from the same category.

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2. pzETH

pzETH represents a restaked position within Symbiotic. Users can deposit stETH, wstETH, wETH, or ETH and receive pzETH. It simplifies staking, as users do not need to manage AVS selection or hardware setup.

Rewards from staking and restaking are enhanced through Symbiotic's infrastructure, making pzETH an attractive option for users looking for simplified access to high-yield restaking.

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3. ezSOL

ezSOL is the restaking token for users on the Jito network. By depositing JitoSOL or SOL, users receive ezSOL, representing their position in securing Node Consensus Networks (NCNs).

This token allows users to earn staking, restaking, and MEV rewards, all of which are auto-compounded. Additionally, ezSOL can be deployed to other top Solana projects, including lending and AMM protocols like Kamino and Orca.

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4. ezEIGEN

ezEIGEN is a liquid token representing users’ restaked EIGEN on EigenLayer. Users can deposit EIGEN tokens to earn additional rewards that are auto-compounded, similar to Compound’s cTokens.

The auto-compounded mechanism helps increase the value of ezEIGEN over time, providing a convenient way to maximize EIGEN rewards.

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Renzo (REZ) Tokenomics

Renzo Protocol's REZ token is essential for driving governance and supporting the protocol's long-term growth.

With a total supply of 10 billion tokens and an initial circulating supply of 1.15 billion, $REZ serves as a key component for incentivizing user participation. Below is the token allocation breakdown:

• Fundraising: 31.56% of tokens allocated for investor backing with a 2-year lock period, including a 1-year cliff and monthly vesting for the following year.
• Community: 32% allocated for ecosystem growth and community incentives like ezPoints rewards.
• Core Contributors: 20% allocated for the Renzo Labs team and advisors, subject to a 1-year cliff and 2-year monthly vesting.
• Foundation: 12.44% for further development, risk assessments, and audits.
• Binance Launch Pool: 2.5% for launch incentives.
• Liquidity: 1.5% for liquidity campaigns, exchange partnerships, and market makers.

Currently, REZ is priced at $0.05304, giving it a market cap of $88.18 million, just enough to place it as a top 500 crypto token.

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Renzo ezPoints Airdrop Program

Renzo Protocol's ezPoints Airdrop Program actively rewards early adopters and drives community engagement. With two airdrop seasons completed and the almost completed third one, millions of REZ tokens have been distributed to dedicated users:

• Season 1: Concluded on April 26th, 2024, distributing 700 million $REZ (7% of the total supply). The minimum eligibility was 360 ezPoints, and wallets with over 500,000 ezPoints had vesting of 50% over three months. Unclaimed tokens were rolled into Season 2.
• Season 2: Ran from April 26th to July 26th, 2024, distributing 500 million $REZ (5% of the total supply). Season 1 participants received a 10% points boost, and new DeFi partner rewards boosted participation.
• Season 3: The so-called "Renzo Amore" is running from July 26th to November 2024, allocating 500 million REZ tokens (5% of the total supply). Of these, 400 million $REZ were distributed to ezPoints recipients, and 100 million were dedicated to DEX liquidity.
• Future Airdrops: After the completion of Seasons 1, 2, and 3, Renzo has allocated 17% of the $REZ supply. Users can still accumulate ezPoints for upcoming campaigns, with roughly 15% of the total supply remaining available for future incentive programs and airdrops.

So far, about 100,000 unique wallet addresses have claimed $REZ, with the minimum airdrop valued at $24.69, a maximum one at $64.48 million, leaving the median one at about $135.

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Renzo Founders

Renzo Protocol was founded by Lucas Kozinski, James Poole, and Kratik Lodha, all veterans of the crypto industry with years of experience in Web3. The team initially bootstrapped their efforts, starting in mid-2023, and faced early financial difficulties before securing investments from major VCs, including Binance Labs, which led to their public launch in January 2024.

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Renzo Protocol Fundraise

Renzo Protocol's fundraising journey has seen strong backing from prominent investors across multiple rounds. In January 2024, the protocol raised $3.2 million at a $25 million valuation, led by Maven 11 Capital, OKX Ventures, and others.

In June 2024, Renzo successfully raised an additional $17 million, with Galaxy Digital and Brevan Howard Digital among the leading investors. The protocol also ran a launchpool on Binance in April 2024, distributing an average of 775 REZ tokens (about $39.7) to 224,205 users.

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Renzo vs Liquid Restaking Token Competitors

Renzo Protocol, as highlighted in a Kairos Research report they sponsored, stands out among Liquid Restaking Tokens (LRTs). Despite a 60% drop in liquidity for top LRTs, Renzo's ezETH reclaimed the number two spot in TVL, surpassing Puffer after enabling auto-compounding.

Renzo leads in liquidity-to-TVL ratio, which is critical for risk management. Demand for ezETH surged, with allocations maxing out on Aave and decentralized exchanges. This strong uptake indicates increasing trust and reliance on Renzo’s restaking model.

As slashing becomes active, Renzo remains well-positioned with a focus on maintaining constant liquidity and DeFi integration like the recent ezUSDC, ezSOL, and ezEIGEN additions.

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Bottom Line

Renzo brands their service as making restaking on Ethereum and Solana "ezpz", and we can't agree more. Among the popular liquid restaking platforms, Renzo stands out as one of the most user-friendly and straightforward options we've tested.

Despite the general drop in interest in LRT in recent months, Renzo's relentless drive to integrate new assets and expand its offerings shows potential to challenge Ether.fi for the liquid restaking crown in the months ahead, and we’re excited to see how this plays out.