On April 23, 2024, Binance announced the launch of the 53rd new coin mining project Renzo Protocol ($REZ). Users can then invest BNB and FUSD into the REZ mining pool on the Launchpad official website after 8:00 (Eastern Time Zone) on April 24, 2024, and receive $REZ token mining rewards within 6 days. Combining the recent funding of Binance Launchpool, peer benchmarking, and mining cost calculation, we preliminarily estimate that the opening price range of $REZ will be 0.3-0.4 USD.

1. About Binance Launchpool

2. Project Introduction

Renzo is a liquid derivatives platform built on EigenLayer. It acts as an interface to the EigenLayer ecosystem by securing the Active Verification Service (AVS) and providing higher returns than ETH staking. Users can earn EigenLayer staking points and Renzo project staking points by staking ETH on Renzo.

3. Project Features
1)  Principle

For every LST or ETH deposited into Renzo, it will mint an equal amount of ezETH. The following diagram shows how Renzo works.


Here's a quick explanation of how it works:

(1) Deposits and minting: Users deposit ETH or Liquid Staking Tokens (LST) into Renzo, and Renzo mints an equal amount of ezETH (a liquid derivative representing the staked asset).

(2) Ensure AVS Security: Renzo can ensure the Active Verification Service (AVS) on EigenLayer, allowing users to inject ETH and ensure the security of these services, thereby obtaining additional rewards in addition to traditional staking rewards.

(3)   Strategic Management: As a strategic manager, Renzo optimizes the repricing process by selecting the best combination of AVS to maximize returns while minimizing risks.

(4) Revenue Generation: The protocol generates revenue through ETH validators and, with the launch of AVS, will generate repricing revenue through Renzo node operators plugging into these services.

(5) Reward Distribution: The protocol captures the rewards generated by repricing and securing AVS and reflects them in the value of ezETH, providing users with tokens in which to earn rewards.

(6) Enhanced participation: Renzo introduces ezPoints and EigenLayer Points to reward users for their participation and contribution to the success of the protocol.

(7) Governance and Decision-making: Governance mechanisms, including snapshot voting and final on-chain governance, provide guidance for strategic decisions, such as selecting AVS supported by node operators.

Through this multifaceted approach, the Renzo Protocol provides Ethereum users with a dynamic, beneficial reset ecosystem that enhances both yield opportunities and the security of the network.

2) About ezETH

ezETH is a liquidity re-collateralization token that represents the user's re-collateralized position in Renzo. Users can deposit native ETH or LST and receive ezETH. Users can receive rewards and corresponding fee income by holding ezETH obtained through staking.

3)  Advantages

One of the great benefits of the Renzo protocol is the increased yields that can be achieved with the ezETH token. The ezETH token allows users to re-stake their assets across multiple projects, thereby earning higher returns than traditional staking.

Another advantage is the cross-chain capability, which simplifies the staking process. There is also a user-friendly interface, which provides users with lower costs and better experience.

The project may also provide multi-token support for wBETH and LST of other projects in the future. By using EigenLayer, Renzo protocol can provide a secure and trustless staking experience.

4) Disadvantages

One drawback of the Renzo protocol is the lack of transferability of ezETH tokens, which results in zero ezETH tokens in circulation. This reduces the ability of users to pool ezETH assets from compromised wallets to more secure wallets.

Another disadvantage is the long asset unlocking period during which the unlocked assets will limit users’ access to funds during the unlocking period due to lack of liquidity, which may cause users to lose valuable profit opportunities.

In addition, a major challenge facing the protocol is smart contract vulnerabilities. Renzo Protocol is a new project that relies on a series of smart contracts (including EigenLayer) for its operation. Any vulnerability in any smart contract may cause the project to suspend operations.

Another challenge is the volatility of the cryptocurrency market, the instability of ETH asset prices, and the uncertainty in the cryptocurrency space, which will affect users' willingness to interact with Renzo or participate in staking.


4.  Team Introduction

Renzo’s founders are Kratik Lodha and Lucas Kozinski. Lucas has worked at Moonwell, Tokensoft and Tezo, and is mainly responsible for business development and operations.

5. Business data

Since Renzo went online, business data has grown rapidly. The current TVL is 3.3 billion US dollars, corresponding to about 1.054 million ETH. The Eigenlayer points generated during this period are about 906 million points, and the Renzo points are about 1.49 billion points.

From the figure below, we can see that there are 53,905 independent coin depositors, and the number of coin depositors has been in a rapid growth state since March 2024.

6. Financing history

It was disclosed that Renzo had completed two rounds of financing, namely a seed round with a valuation of US$25 million and an investment from Binance Labs disclosed on February 22, 2024.

7. Token Economy

REZ will be used to vote on governance proposals related to the Renzo protocol, some of which will be key measures for the operation of the protocol. The total supply of REZ is 10,000,000,000, and the circulating supply after listing will be 1,050,000,000 (approximately 10.50% of the total token supply).

8.  Prediction of secondary market launch

1)  Recent Launchpool performance

From the figure below, we can see the performance of Binance’s recently launched tokens through Launchpool and Launchpad. The recent Launchpool has a high return rate and high participation. The number of BNB participating in this Launchpool has exceeded 18.58 million.

2) Calculation of opening funds

3) On-chain loan calculation

Calculated based on the on-chain borrowing cost, the coin price required to recover the investment at the opening is approximately US$0.248.

4)  Comparable valuation

5)   OTC Price

According to the OTC market Whale Market, the current bid price of REZ tokens is US$0.3133, the ask price is US$0.3618, and the total transaction volume is US$573,000.


6)    Summary

To sum up, we believe that the reasonable price range of REZ token at the opening is 0.3-0.4 USD.