”Complete Audit of Renzo Restaked ETH (EZETH Token)“

1. Executive Summary

Overview of the EZETH token and its unique value proposition.

Renzo Restaked ETH (EZETH) is a token designed for liquid restaking and strategy management within the EigenLayer ecosystem. EZETH offers more flexibility and higher yields than traditional staking, simplifying collaboration between users and EigenLayer node operators and providing a more attractive option for maximizing returns compared to traditional ETH staking.

Currently priced at $3,547.57 USD, EZETH has a market cap of $3,746,070,952 USD, a 24-hour trading volume of $40,908,464 USD and currently ranked 209 in listing of cryptocurrency coin listings. While it has underperformed against the broader crypto market in the last month, its key statistics and active community suggest potential for growth.

SOURCES:

https://coinpaprika.com/coin/ezeth-renzo-restaked-eth/ 

https://www.coingecko.com/en/coins/renzo-restaked-eth 

https://coinmarketcap.com/currencies/renzo-restaked-eth/ 

Brief summary of EZETH Token, the investment opportunity.

Renzo Restaked ETH (EZETH), a liquid restaking token representing a user's restaked position on the Renzo Protocol platform offers investment opportunities where users can earn EZETH by depositing Ethereum (ETH) or Liquid Staking Tokens (LST), referring users, and interacting with participating protocols like Pendle, Linea, and Ionic.

Investing in EZETH involves considering risk appetite, historical performance (22.27% increase over 30 days, -0.58% decrease in 24 hours), and future growth potential.

SOURCES:

https://www.coingecko.com/learn/earn-renzo-points-potential-renzo-protocol-airdrop 

https://www.blockchainappfactory.com/blog/renzo-like-liquid-restaking-platform-development/ 

https://www.binance.com/en-NG/how-to-buy/renzo-restaked-eth

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2. EZETH TOKEN Overview

Mission and Vision:  long-term objectives.

EZETH's mission is to simplify the restaking process, making it accessible to a broader user base. As it is designed to enhance Ethereum staking by securing Actively Validated Services (AVSs) for higher yields.

The vision is for EZETH to become the primary platform for restaking on EigenLayer, increasing adoption and efficiency of staked assets.

Overall, EZETH focuses on simplifying restaking, driving adoption, providing higher yields for users, fostering community engagement, and expanding services.

SOURCES:

https://iq.wiki/wiki/renzo-restaked-eth-ezeth 

https://www.luganodes.com/blog/Renzo_Restaking_Hub/ 

https://cryptoadventure.com/what-is-renzo-protocol-the-liquid-restaking-primitive-explained/ 

Problem Statement:  Challenges or gaps EZETH TOKEN aims to address.

EZETH token developed by Renzo, in collaboration with Connext addresses challenges cross-chain restaking. It aims to reduce high fees associated with restaking on Layer 2 (L2) networks, enable cross-chain restaking for multiple L2 networks, use Connext's bridging and message-passing protocol for seamless token transfers, and simplify the restaking process for users. 

By addressing these issues, EZETH aims to improve the efficiency, accessibility, and user experience of cross-chain restaking within the decentralized finance (DeFi) ecosystem.

SOURCES:

https://www.coindesk.com/tech/2024/02/28/protocol-latest-tech-news-crypto-blockchain/ 

https://hackmd.io/%40PrismaRisk/ezETH 

Solution: How the EZETH TOKEN proposes to solve these problems.

EZETH simplifies the restaking process and strategy for users by handling the complexities of EigenLayer caps and Actively Validated Services (AVSs) and making it easier for users to participate and earn rewards. EZETH also provides additional staking rewards on top of existing ones from liquid staking derivatives or Ethereum resulting in improving capital efficiency.

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3. EZETH TOKEN Technology and Product

Technical Architecture: Overview of the blockchain and other technologies used.

 Renzo Restaked ETH (EZETH) proof-of-stake (PoS) consensus mechanism allows validators to stake their ETH tokens to participate in the validation process and earn rewards. Built on the Ethereum blockchain and EigenLayer protocol, it enables secure transactions and liquid representation of staked ETH.

It leverages pooled security, smart contracts, and cross-chain staking for efficient management and enhanced security. Actively Validated Services (AVS) and node operators support on-chain activities, while the Liquid Restaking Token (LRT) represents the user's restaked position. DeFi integration provides broader investment opportunities. Overall, Renzo combines blockchain technology and innovative features for a secure and efficient staking experience.

SOURCES:

https://coinmarketcap.com/currencies/renzo-restaked-eth/ 

https://www.gate.io/learn/articles/what-is-the-renzo-protocol-all-you-need-to-know-about-ezeth/2413 

https://cryptoadventure.com/what-is-renzo-protocol-the-liquid-restaking-primitive-explained/ 

Product Offering: EZETH TOKEN Description of the product or service, including its development stage.

The Renzo Restaked ETH (EZETH) token is a liquid restaking token within the EigenLayer ecosystem. It allows users to deposit ETH or liquid staking tokens and receive ezETH in return, which is a reward-bearing token that enhances yield through Actively Validated Services (AVSs).

Key features of EZETH include its reward-bearing nature, yield enhancement, and unstaking requirements (minimum of 7 days).

Market performance shows a current price of $3,547.57 USD, with a market cap of $3,746,070,952 USD. EZETH is available on about 40 exchanges and the most active market pair being EZETH/WETH on Balancer V2. 

SOURCES:

https://www.theblock.co/price/290398/renzo-restaked-eth-ezeth-eur 

https://coinpaprika.com/coin/ezeth-renzo-restaked-eth/ 

https://iq.wiki/wiki/renzo-restaked-eth-ezeth 

Innovation: How EZETH TOKEN innovates or improves upon existing solutions.

Renzo Restaked ETH (EZETH) introduction of several innovations such as native ETH restaking, layer 2 native restaking, enhanced asset utilization, increased interoperability, improved user experience and fostering permissionless innovation has enhanced DeFi by offering dynamic restaking, fostering integration, and creating new frameworks for asset utilization and interoperability.

Roadmap: EZETH TOKEN Development milestones, past achievements, and future goals.

Renzo Protocol key milestones achieved include raising $3.2 million in seed funding, launching a beta mainnet, integrating with Chainlink Price Feeds, and reaching a TVL of $3 billion.

Its past achievements include simplifying restaking, providing cross-chain functionality, building partnerships, and offering a comprehensive rewards system.

Future plans focus on expanding the mainnet, increasing adoption, enhancing security through EigenLayer, and leveraging more Chainlink capabilities.

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4. Market Analysis of EZETH TOKEN 

Target Market: Size, demographics, and behavior of the potential market.

The Renzo Restaked ETH (EZETH) operating within the Ethereum ecosystem has a fully diluted valuation (FDV) of $3,541,331,845 and a CoinGecko ranking of #32.

996,928  EZETH tokens are in circulation, with a theoretically infinite maximum supply.

Also the daily trading volume is $58,058,085 and the most active trading pair is EZETH/WETH on Balancer V2. The price of EZETH in ETH is 0.9975 ETH as of the time of writing.

The all-time high of $4,106.74 was recorded on March 12, 2024, and the all-time low of $2,198.04 was recorded on January 26, 2024.

Competitive Landscape: Analysis of competitors and EZETH TOKEN position in the market.

EZETH competes with Ether.fi's eETH in the liquid staking token market.

While Ether.fi leads in total value deposited, EZETH has a stronger presence on layer 2 networks, with $680 million of its total supply on these networks compared to Ether.fi's $428 million.

EZETH's total supply is 1,055,901 EZETH and its strategic partnerships, such as its integration with Blast, have also contributed to its growth.

The competition in the LRT sector is expected to intensify, with EigenLayer's recent mainnet launch and further leveraged farming integrations on the horizon.

Overall, its ability to adapt to these changes and maintain its strong presence on layer 2 networks will be crucial for its future growth.

Market Trends: Current and anticipated trends that could affect EZETH TOKEN.

Current market trends for EZETH token indicate a 4.30% price increase in the last 24 hours and a 2.74% increase over the past 7 days. It has experienced significant price fluctuations, ranging between $3,000 and $3,600 in recent months.

Despite this volatility, market sentiment around EZETH remains positive, driven by growing interest in liquid staking and long-term growth potential.

Short-term forecasts predict continued price fluctuations, with an average price of $3,808.19 in July and $4,164.10 in August.

Long-term forecasts are highly optimistic, with expected average prices of $22,689.01 (end of 2024), $38,971.71 (end of 2025), and $101,433.21 (end of 2030).

Several factors could impact EZETH's price, including project developments, market conditions, and competition within the liquid staking market.

Overall, current trends suggest high volatility and positive sentiment, while anticipated trends indicate a mix of short-term fluctuations and long-term growth.

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5. Team and Advisors

Backgrounds: Experience and expertise of EZETH TOKEN founding team and key members.

The Renzo Restaked ETH (ezETH) founding team members have a wealth of experience and a strong background in the crypto industry:

Lucas Kozinski: The founder of Renzo, Lucas Kozinski is a veteran of the crypto industry. He has been involved in the development of several projects and has a deep understanding of the Ethereum ecosystem. Kozinski emphasizes the importance of liquidity, efficiency, and risk management in the development of Renzo's technology stack.

Other Founders: Although the names of the other founders are not explicitly mentioned, it is mentioned that all three founders are veterans of the crypto industry. They began their journey in the summer of 2023, sustaining themselves solely on their own funds until meeting Maven11 in November of that year, without anyone receiving a salary.

These individuals have demonstrated their commitment to the project by working without salaries until securing investments. This dedication to the project's success is reflected in the team's focus on building a robust and scalable technology stack, as well as their emphasis on user protection and risk management.

EZETH TOKEN Advisory Board: Influence and contribution of the advisors.

While the specific roles and contributions of advisors are not mentioned, Renzo Restaked ETH (EZETH) project's successful fundraising and rapid growth suggest that it has benefited from the expertise and guidance of experienced advisors.

Renzo Protocol, which issues the EZETH token, was founded in 2023 by Kratik Lodha and Lucas Kozinski and has raised $3.2 million in seed funding from several prominent investors. Binance Labs has also invested in the Renzo Protocol. The protocol simplifies the process of liquid restaking on Ethereum, allowing users to deposit ETH or other liquid staking tokens and receive EZETH in return. 

Team Structure: EZETH TOKEN Effectiveness of the team's organization and communication.

Renzo Restaked ETH EZETH demonstrates effective organization and communication through clear roles, efficient governance using EZETH tokens, and strategic partnerships with investors like Binance Labs. The team prioritizes transparency in progress and plans, provides regular updates, and fosters community engagement through referral programs. These combined efforts contribute to a well-structured and informed ecosystem, building a strong foundation for the project.

SOURCES:

https://www.coingecko.com/learn/earn-renzo-points-potential-renzo-protocol-airdrop 

https://coinlaunch.space/projects/renzo-protocol/ 

https://www.gate.io/learn/articles/renzo-ethereum-restaking-track-tvl-reaches-3-billion/2749 

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6. EZETH TOKEN Tokenomics and Financials

Renzo Restaked ETH’s tokenomics and financials are as follows:

EZETH currently trades at $3,547.57 with a market cap of $3,746,070,952 and a circulating supply of 996,928 tokens. Despite a recent price decline, EZETH has outperformed the global cryptocurrency market. It reached an all-time high of $4,106.74 on March 12, 2024, and an all-time low of $2,198.04 on April 24, 2024. As a reward-bearing token, EZETH earns rewards in ETH, USDC, and AVS reward tokens. Renzo charges a 10% fee on restaking rewards, split between protocol reserves and node operators.

SOURCES:

https://coinmarketcap.com/currencies/renzo-restaked-eth/ 

https://www.coingecko.com/en/coins/renzo-restaked-eth 

[https://docs.renzoprotocol.com/docs/renzo/usdezeth 

EZETH TOKEN Utility: The purpose and use cases for EZETH TOKEN.

Renzo Restaked ETH (EZETH) provides liquidity access through trading EZETH, continuous reward distribution in ETH, USDC, and AVS-specific tokens, flexible withdrawals with a minimum unbounding period, strategic restaking options based on individual AVSs, and cross-chain bridging capabilities.

Advantages of using EZETH include simplified staking, enhanced economic security, increased financial value across networks, and greater flexibility for protocols.

EZETH TOKEN Distribution: Allocation of tokens (e.g., team, advisors, public sale).

The Renzo Restaked ETH (EZETH) token distribution involves the following key allocations:

Fundraise Allocation: This portion represents token rights obtained by investors backing Renzo's early development. Investor tokens are subject to a total 2-year lock, with a 1-year cliff followed by 10% unlock and 1-year linear monthly vesting thereafter.

Token Distribution

Community: 32% of the total supply is allocated to developing and supporting the growth of the Renzo ecosystem. This includes:

Season 1 Airdrop: 7% of the tokens are distributed to participants in the first season of the ezPoints Campaign. The remaining 5% will be used for various community campaigns, including the upcoming second season of the incentives campaign, and cross-chain initiatives.

Core Contributors: 20% of the tokens are distributed to the Renzo Labs team and advisors who have worked on the protocol. These tokens are locked on a 1-year cliff with 2-year linear monthly vesting thereafter. No core contributor tokens are unlocked before the 1-year cliff.

Foundation: 12.44% of the tokens are allocated to fund initiatives that widen the reach of $ezETH, such as further development, risk assessments, and audits.

Binance Launch Pool: 2.5% of the tokens are allocated to the Binance launchpool.

Liquidity: 1.5% of the tokens are allocated for liquidity campaigns, exchange (CEX & DEX) partnerships, and market makers.

The EZETH token distribution is managed by the Renzo Protocol, a liquid restaking platform. The tokenomics and vesting schedule for EZETH are designed to align with the long-term growth of the protocol and its community. 

Financial Model: EZETH TOKEN Revenue streams, cost structure, and profitability projections.

EZETH’s primary revenue stream is through its native token, REZ, distributed via an airdrop meant to incentivize ecosystem participation. However, the tokenomics have been criticized for limited airdrop allocation and a distribution structure favoring Binance launchpool farmers, causing community backlash and a sell-off. The cost structure of EZETH is largely driven by maintaining its decentralized exchange (DEX) liquidity pools, but the exact details are not publicly disclosed. Given the recent depeg and liquidations, profitability projections are challenging.

SOURCES:

https://coinchapter.com/ezeth-depegs-triggers-60-million-liquidation-bloodbath/ 

https://libguides.wustl.edu/c.php?g=1304883&p=9602830 

https://www.immunebytes.com/blog/list-of-largest-crypto-hacks-in-2024/ 

Funding History: EZETH TOKEN Previous funding rounds, investors, and current valuation.

Renzo, the Ethereum liquid restaking solution, has received significant funding and investment over the past year:

In a successful seed funding round last month, Renzo attracted $3.2 million in funding at a company valuation of $25 million.

Binance Labs, the investment and incubation division of Binance (valued at $10 billion), has recently made an undisclosed investment in Renzo. This investment mirrors the structure of the earlier seed round, combining equity and token warrants at a one-to-one ratio.

The Binance Labs investment represents their second venture into the Ethereum liquid restaking arena, having previously backed Puffer Finance.

Since its inception, Renzo has accumulated $410,581,280 in Total Value Locked and has attracted 170,244 ezETH holders.

In summary, Renzo has secured substantial funding from prominent investors like Binance Labs, raising $3.2 million in a seed round and attracting additional undisclosed investment from Binance's venture capital arm. This has helped Renzo grow its platform and user base, with over $410 million in total value locked and nearly 170,000 ezETH holders.

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 7. EZETH TOKEN Community and Ecosystem

Community Engagement: Size, growth, and engagement levels of the community.

The Renzo Protocol has achieved significant growth and community engagement. With over $498 million locked in, it's the fourth-largest restaking protocol. The protocol incentivizes participation through its EZPoints system, rewarding users for holding EZETH and contributing to the protocol. It has also conducted two airdrop seasons, distributing REZ tokens to the community. Partnerships with Connext Network, Pendle Finance, and Chainlink have enhanced its offerings and expanded its reach.

Partnerships: EZETH TOKEN Strategic alliances and partnerships.

Renzo Restaked ETH (EZETH) has formed strategic alliances and partnerships to expand its reach and enhance its services.

Binance Labs, the venture capital and incubation arm of Binance, has invested in Renzo to support the development of the EigenLayer ecosystem and promote the adoption of liquid restaking on the platform.

Renzo has partnered with the BNB Chain to allow users to directly restake their ETH for EZETH without the need for bridging.

These strategic alliances and partnerships demonstrate EZETH's commitment to expanding its reach and fostering a robust ecosystem for liquid restaking and Actively Validated Services (AVSs).

Network Effects: EZETH TOKEN The project's strategy for achieving and benefiting from network effects.

The Renzo protocol employs a multi-faceted strategy to achieve network effects. It operates on multiple Layer 2 scaling solutions and offers a user-friendly interface to broaden its reach. Cross-chain re-staking, partnerships with Maven 11, OKX Ventures, and Binance Labs, and a reward system with Renzo Points further incentivize user participation. The ezETH token provides a liquid representation of staked ETH, and Actively Validated Services (AVSs) ensure network security. These combined strategies aim to create a robust network of users, partners, and applications, benefiting from the network effects of a large and active community.

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8. Risks and Challenges

Market Risks: EZETH TOKEN Exposure to market volatility and competitive threats.

Renzo Restaked ETH (EZETH) offers higher yields than traditional Ethereum staking.

EZETH, being a derivative token, is exposed to market volatility, which can lead to price fluctuations and potential loss of staked assets due to smart contract vulnerabilities.

The staking market is competitive, with regulatory uncertainty and technological disruption posing additional challenges for ezETH.

Mitigating risks involves diversifying investments, conducting thorough research, and implementing strategic risk management.

Technical Risks: EZETH TOKEN Potential technical hurdles in development or deployment.

EZETH face several technical risks which include coding errors and vulnerabilities, regulatory and legal risks arising from an evolving and varying landscape, market volatility, liquidity risks which stem from low trading volumes and potential manipulation, security risks, scalability and network congestion, governance and consensus risks and counterparty risks are introduced through interactions with third-party platforms. To mitigate these risks, thorough research, caution, security practices, and diversification are crucial for both developers and users.

SOURCES:

https://blockchainmagazine.net/top-ethereum-tokens-with-the-most-promising-potential/ 

https://www.immunebytes.com/blog/list-of-largest-crypto-hacks-in-2024/ 

https://hackmd.io/%40PrismaRisk/ezETH 

Regulatory Risks: EZETH TOKEN Legal challenges that could impact the project's viability.

The EZETH token faces several legal challenges that could impact its viability. These challenges include its classification under existing laws, consumer protection concerns, and the need for regulatory clarity.

Other Risks: EZETH TOKEN Any other potential risks not covered above.

Renzo Restaked ETH carries several risks not explicitly covered in the provided sources. These include vulnerabilities in the smart contracts the protocol relies on, the volatile nature of the crypto market, and potential liquidity issues due to the inability to transfer EZETH tokens between users.

Additionally, the lengthy unstaking period can limit user access to funds, and the protocol's dependence on the new EigenLayer system introduces further uncertainty. The risk of depeg, where ezETH loses its peg to ETH, is heightened by the inability to reverse the redemption process and the use of ezETH as collateral.

Other risks include the possibility of slashing (penalties for validator misconduct), smart contract exploits, changing regulatory environments, and market manipulation. These factors collectively underscore the multifaceted risks associated with the EZETH token and the Renzo Protocol.

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9. EZETH TOKEN SWOT ANALYSIS

Strengths

EZETH is a reward-bearing token, which means its value can increase relative to the underlying tokens due to its yield enhancement within Actively Validated Services (AVSs).

EZETH is traded on several decentralized exchanges, including Thruster V3, Uniswap V3, and Balancer V2, ensuring high liquidity and ease of trading.

The trading volume of EZETH has seen a significant increase, with a 62.70% rise in the last 24 hours, indicating growing market activity and interest.

EZETH is integrated with EigenLayer, a decentralized service that provides a robust and secure environment for restaking and earning rewards.

Weaknesses

EZETH's value and functionality are heavily dependent on EigenLayer's performance and stability, which could pose a risk if EigenLayer experiences issues.

EZETH withdrawals are currently disabled, which may limit user flexibility and create inconvenience.

The unstaking process typically requires a minimum of 7 days, which could lead to liquidity constraints for users who need to access their funds quickly.

EZETH's value is tied to the performance of AVSs, which could be affected by various market and regulatory factors, potentially impacting EZETH's value.

Opportunities

The demand for liquid staking solutions is increasing, and EZETH is well-positioned to capitalize on this trend by providing a reliable and efficient way to stake and earn rewards.

EZETH can expand its reach into new markets and user bases by integrating with more decentralized exchanges and platforms.

As EigenLayer grows and becomes more widely adopted, EZETH's value and functionality are likely to benefit from this increased adoption.

EZETH can be used in various new applications and use cases, such as decentralized finance (DeFi) protocols, which could increase its utility and value.

Threats

EZETH's value is susceptible to market volatility, which could lead to significant price fluctuations and potential losses for users.

EZETH and its underlying ecosystem are subject to regulatory risks, which could impact the token's value and functionality.

As a decentralized token, EZETH is vulnerable to security risks, such as hacking and other forms of cyber attacks, which could compromise user funds.

EZETH faces competition from other tokens and platforms offering similar services, which could lead to a decrease in its market share and value.

In summary, while Renzo Restaked ETH has significant strength, it faces challenges related within the liquid staking market such as project developments, market conditions, and competition. However, Renzo's innovative liquid restaking platform, strategic partnerships, and user-centric design, makes more room for substantial community size, growth, and engagement level.

SOURCES:

https://docs.renzoprotocol.com/docs/renzo/usdezeth 

https://cryptoadventure.com/what-is-renzo-protocol-the-liquid-restaking-primitive-explained/

https://en.thebigwhale.io/article-en/renzo-rez-analysis-of-the-restaking-project-supported-by-binance 

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10. How EZETH Token works with TheStandard.io 

Possible collateral type: 

The Standard protocol allows users to leverage EZETH TOKEN as collateral to secure loans in EUROs and, in the near future, USDs, without any interest charges. This non-custodial system ensures a secure and user-controlled experience. 

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11. Conclusion and viability score

Final assessment and Score:

The EZETH token, also known as Renzo Restaked ETH, is a liquid staking token that allows users to stake their Ethereum and earn staking rewards while retaining liquidity. It is a collateralized token that can be used in various DeFi activities, such as lending, trading, or providing liquidity. The token is backed by a decentralized protocol that ensures the security and integrity of the staked assets therefore it has a positive and prospective score.