Renzo expands beyond restaking with basis trade product on Hyperliquid

Crypto restaking platform Renzo Protocol has rebranded to Renzo Finance as it expands into onchain structured yield products, beginning with a basis trade product on Hyperliquid.

Structured products are a multitrillion-dollar category in traditional finance, but Renzo says similar products remain limited onchain because they can be difficult to set up, monitor, and manage. Renzo aims to close that gap by automating these strategies for onchain users.

How Renzo Basis works

Renzo Finance's first onchain yield product is called Renzo Basis. The product is designed to automate a basis trade, a strategy that buys an asset in the spot market while taking an equal short position in perpetual futures.

The strategy is meant to reduce exposure to the asset's price moves because the long and short positions offset each other. Users earn yield from the funding rate, a fee paid between perpetual futures traders.

"A basis trade earns yield by holding two opposite positions at once: long by buying the asset on the spot market, and short by the same amount using a perpetual future," Lucas Kozinski, founder of Renzo Labs, the development company behind Renzo, told The Block. "Because the two sides cancel each other out, the price move of the asset doesn't matter. What's left is the funding rate, a fee traders pay every hour to hold their side of the trade. That fee is the yield users earn."

Renzo says the product automates the process using three safeguards, including a hedge guard, a yield guard, and a safety buffer.
Asked if the product uses AI for automation, Kozinski said it does not currently use AI. He said Renzo Basis uses Hyperliquid's agent wallets, also known as API wallets, which let an app trade on a user's behalf without taking custody of funds. Renzo uses those wallets to build and monitor the strategy, with safeguards that can be customized by the user.

Competition and next products

Renzo is entering a market where Ethena and Bitwise's Superstate, among others, already offer basis trade yield products. Kozinski said Renzo's difference is that its product is fully onchain, self-custodial, and customizable.

"The difference is Renzo’s product is fully onchain (vs offchain), self custody (vs third party) and allows the depositor to manage their risk (vs centralized / pooled risk)," Kozinski said. "This means a depositor can choose what asset, venue and risk parameters they want exposure to vs depositing into a pool with a centralised third party that makes all the decisions on their behalf."

As adoption of real-world assets grows, there will be a "massive growth opportunity" for onchain structured products and advanced yields, according to Kozinski.

Renzo Basis is launching on Hyperliquid and will initially support BTC and HYPE. All Hyperliquid assets that have both spot and perpetual markets are expected to follow, Kozinski said. Renzo also plans to expand to other DeFi venues, with Lighter on Robinhood next on its roadmap. He said that launch would introduce an onchain equity perpetual basis trade.

Renzo is also experimenting with other structured products, including autocallables and growth notes, Kozinski said. Autocallables are structured financial products that pay regular coupons and automatically redeem early if an underlying asset meets a pre-set performance target. Growth notes let investors track the upside performance of an asset while offering a level of downside protection.

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