Binance Lab Funds EigenLayer’s Liquid Restaking Service Renzo

Binance Labs, a cryptocurrency venture capital firm, has revealed that it has invested in Renzo, an interface for the EigenLayer ecosystem. The investment was made in a startup seed round in January, with Binance Labs joining other venture firms and crypto ecosystems in investing $3.2 million. The exact amount of Binance’s investment has not been disclosed. Renzo offers Ethereum smart contracts that allow for communication between stakers, node operators, and actively validated services (AVSs). This means that users can restake their assets, delegate them to node operators, and interact with on-chain service modules.

An actively validated service in the EigenLayer ecosystem can be a protocol or service that operates based on Ethereum’s validation stake model but has its own validating semantics. These AVSs also provide token rewards to incentivize users and node operators. Renzo claims to offer a higher yield than traditional Ether staking. The restaking process involves depositing ETH or liquid staking tokens (LST) like stETH. In return, users receive an equivalent amount of ezETH, which represents their restaked position at Renzo. There are risks involved, such as exposure to vulnerabilities in smart contracts, governance risks, and the potential for losses due to price fluctuations in underlying assets. Therefore, it may not be suitable for investors with low-risk tolerance.

Coinciding with Binance’s investment in Renzo, venture capital firm Andreessen Horowitz (a16z) has announced a $100 million funding round for EigenLayer. According to reports, a16z was the sole investor in this round. Previously, in March, EigenLayer raised $50 million in a funding round led by Blockchain Capital. The protocol has seen significant growth, becoming Ethereum’s third-largest protocol with a total value locked of $7.91 billion, a 347% increase compared to the previous month, according to DefiLlama data.