Renzo, a liquidity restaking protocol based on the EigenLayer ecosystem, has attracted widespread attention in the cryptocurrency field in recent years. The project has not only received support from well-known investment institutions such as Binance Labs and OKX Ventures, but also provides users with higher returns and a more convenient staking experience through its unique technology and economic model. This article will analyze Renzo's core features, development trends and economic models in detail to help readers fully understand this innovative project.
Background and Investment Support
Renzo's success is inseparable from its strong investment background. According to the crypto data platform RootData, Binance Labs participated in Renzo's investment. In January this year, Renzo announced the completion of a $3.2 million seed round of financing, which was led by Maven11 and participated by OKX Ventures, IOSG Ventures, Figment Capital, SevenX Ventures and others. OKX Ventures said that this is its first official investment project in the EigenLayer ecosystem.
Core Features of Renzo
Liquidity Re-staking Protocol
Renzo is based on the EigenLayer ecosystem and aims to simplify complex staking mechanisms for end users and enable rapid cooperation with EigenLayer node operators and active verification services (AVS). Unlike traditional staking, Renzo effectively releases the liquidity of re-staking ETH by introducing the derivative token ezETH.
High yield and risk balance
Renzo uses advanced algorithms to balance returns and risks in real time, automatically making optimal configuration choices for users to ensure stable and considerable investment returns. The project party said that REZ tokens have both practical and governance uses, allowing users to vote on governance proposals for matters related to the Renzo protocol.
Project Development Dynamics
Renzo announced the launch of the mainnet in October last year, and in the third month of its launch alone, the TVL (total locked volume) exceeded US$100 million. According to Deflama data, Renzo's TVL is currently US$3.3 billion, ranking second in the LRT track.
Renzo ezPoints Program
In January this year, Renzo launched the Renzo ezPoints program to reward users who contribute to the protocol. One way to earn points is by minting ezETH, which serves as Renzo's liquidity re-staking token. ezETH can automatically earn rewards and ensure liquidity, allowing users to participate in DeFi while retaining the rewards of re-staking. There is no limit on token deposits in Renzo, which is one of the main factors for its TVL surge.
Development Plan
According to its founder Lucas Kozinski, Renzo's development plan is divided into three phases and will take one to one and a half years:
Increase and distribute liquidity: Renzo is currently in this phase, having integrated more than 50 DeFi protocols and launched native re-staking on multiple Layer2s.
Improve efficiency: The second phase will focus on improving efficiency and solving the Gas cost problem on Eigenlayer to increase yields.
Enable AVS's "Slashing" function: The third phase is to enable AVS's "Slashing" function to build portfolios and manage risks in the next 6 to 12 months.
Currently, Renzo has worked with companies such as Gauntlet to establish a risk and portfolio construction framework to capture market share and win user trust.
REZ Token Economic Model
The total supply of REZ tokens will be 10 billion, and the circulating supply at the time of listing will be 1.05 billion, accounting for about 10.50% of the total token supply. The specific allocation mechanism is as follows:
Airdrops will allocate 10.00%
Investors and consultants will allocate 31.56%
Teams will allocate 20.00%
Foundations will allocate 13.44%
DAO treasury will allocate 20.00%
Liquidity budget will allocate 2.50%
Token unlocking progress
From the perspective of token unlocking progress, REZ tokens will maintain a relatively low circulation ratio in the initial circulation stage for nearly a year, and the token supply will mainly consist of Binance Launchpool and airdrop shares. By the end of the first quarter of next year, the circulation supply of REZ tokens will enter an accelerated stage.
Controversy over the economic model
As the economic model of the REZ token was made public, doubts began to emerge in the crypto community, among which the way the economic model was presented in charts became the focus of controversy.
Some investors pointed out that the economic model allocated a large number of tokens to investors and teams. The project was accused of concealing this fact by designing a misleading pie chart. In the pie chart, the "half" marked at the bottom actually occupies 62%, but the two parts that only accounted for 2.5% were visually enlarged to about 20%. Some investors even released a pie chart that they believed to be more accurate for comparison.
In addition, some investors also expressed doubts about the "decentralization of the protocol" claimed by the project. They sarcastically said that it was ridiculous that the project advocated decentralization on the one hand, but only airdropped 5% of the token supply on the other hand. They further pointed out that up to 70% of the token supply is still in the hands of insiders, which shows that the so-called decentralization has not been achieved at all.
Airdrop activity
As the controversy within the community escalates, Renzo announced today that it will open the first quarter airdrop application activity on May 2, distributing 5% of the total token supply. It should be noted that Renzo's first season incentive activity will end on April 26, and users who sell their ezETH holdings before then may lose their airdrop qualifications. Users can claim REZ on May 2 through the official claim website.
It is understood that Renzo will linearly distribute 500 million REZ (5% of the total) based on the ezPoints accumulated by users. 50% of the tokens of the top 5% addresses will be unlocked immediately at TGE, and the rest will be gradually released over the next 6 months. In addition, 2% of the 5% airdrop in the first season (i.e. 0.1% of the total token supply) has been allocated to NFT communities such as Milady Maker and SchizoPosters. The second season reward activity will start immediately on April 26, 2024.
In addition, Renzo also stated that airdrop qualifications depend on ezPoints at the time of the snapshot, regardless of whether the ezETH balance at the time of the snapshot is sold; users whose Pendle YT expires before the snapshot are eligible for airdrops as long as the score meets the minimum standard; NFT airdrops will be calculated based on the number of NFTs, not the number of wallets.
Conclusion: As a pioneer in the field of liquidity re-staking, Renzo provides users with higher returns and a more convenient staking experience through its innovative technology and economic model. Although its economic model is controversial, the project has demonstrated its potential and confidence in the market through transparent airdrop activities and clear development plans. It is believed that Renzo will continue to play an important role in the cryptocurrency field over time and bring more benefits and opportunities to users.