Binance Labs invests in Ethereum liquid restaking protocol Renzo

Binance Labs, the $10 billion venture capital and incubation arm of crypto exchange Binance, has invested an undisclosed sum in Renzo, an Ethereum liquid restaking protocol based on EigenLayer.

Binance Labs' investment in Renzo comes shortly after the startup raised $3.2 million in a seed funding round at a $25 million valuation last month. Renzo founding contributor Lucas Kozinski told The Block that Binance Labs' investment has the same structure as the seed round, i.e., equity with token warrant in a 1:1 ratio.

Renzo is Binance Labs' second recent investment in the Ethereum restaking space. The firm invested in Puffer Finance last month, which has quickly grown to become the second-largest liquid restaking protocol since its launch on Feb. 1. Puffer has over $1 billion locked within its platform, while Renzo follows as the fourth-largest restaking protocol with over $375 million locked within its protocol, according to DeFiLlama.

Ethereum liquid restaking is currently one of the hottest areas in crypto, with billions of dollars pouring into the vertical. The trend started with the launch of EigenLayer, which introduced a restaking system to Ethereum last June. EigenLayer currently boasts a total value locked of $7.8 billion, DeFiLlama shows. EigenLayer-based protocols, including Renzo and Puffer, have collectively amassed over $3.5 billion worth of assets.

Liquid restaking protocols "play a pivotal role in unlocking liquidity and maximizing capital efficiency, while also abstracting technical complexities for users," Yi He, co-founder of Binance and head of Binance Labs, told The Block in a statement. 

Native ETH restaking on BNB Chain

With fresh capital from Binance Labs, Renzo plans to launch native ETH restaking on BNB Chain via its recent partnership with cross-chain protocol Connext, Kozinski said. That means BNB Chain users will be able to directly restake ETH for ezETH, Renzo's liquid restaking token, without bridging and get rewards in EigenLayer points and Renzo's ezpoints. Points are similar to normal loyalty points like airline miles and are designed to encourage engagement without being directly tradable or valuable.

Renzo already also accepts deposits of wBETH (Binance's liquid staking token) for restaking, Kozinski said, adding that the protocol remains focused on building new restaking integrations for BNB Chain users. 

Besides wBETH, Renzo also accepts Lido's liquid staking token stETH in addition to native ETH for restaking, Kozinski noted.

Renzo is currently live in a mainnet beta. The general mainnet launch is expected after EigenLayer's Stage 3 launch. Renzo's other investors include Maven11, Figment Capital, SevenX Ventures, IOSG Ventures, and OKX Ventures.