Renzo Restaked LSTPrice

(PZETH)

pzETH is a Liquid Restaking Token (LRT) issued by Renzo, representing a user's restaked position within the Symbiotic ecosystem. Its primary role is to act as an interface for users to participate in restaking on protocols like EigenLayer, securing Actively Validated Services (AVSs). By holding pzETH, users can gain exposure to restaking rewards while maintaining liquidity, simplifying access to complex restaking strategies without direct management.

Users initiate the process by depositing liquid assets such as stETH, wstETH, wETH, or native ETH into Renzo. In return, they receive pzETH, which signifies their claim on the restaked assets. Renzo then strategically manages these deposited assets, deploying them to secure Actively Validated Services (AVSs) within the Symbiotic ecosystem. This management includes handling smart contract interactions and underlying hardware. Through this process, pzETH holders participate in both ETH staking and restaking activities, accumulating rewards.

Holding pzETH offers several key advantages. Users can earn enhanced rewards derived from both underlying ETH staking and restaking, without the need to actively manage complex strategies or operate nodes. It provides liquidity, allowing pzETH to be traded or potentially used as collateral in various decentralized finance protocols. This abstraction of complexity and provision of liquidity makes it a streamlined solution for participating in the restaking economy and maximizing capital efficiency.

The rewards for pzETH originate from a dual-stream approach. Firstly, a portion of the rewards comes from standard ETH validators, reflecting the yield generated through traditional Ethereum staking. Secondly, as Actively Validated Services (AVSs) become operational on underlying restaking protocols, Renzo Node operators connect to these AVSs. This connection enables the generation of additional restaking yield, which contributes to the overall rewards distributed to pzETH holders, enhancing the total return.

pzETH is designed to be fully redeemable for its underlying restaked collateral from the outset. To withdraw, users swap their pzETH back for the original assets, such as ETH or wstETH. It's important to note that due to the underlying unstaking requirements of the restaking protocols, the full withdrawal process can take up to 15 days to complete. Renzo facilitates this redemption, managing the interaction with the underlying protocols to return the user's assets.

Users depositing ETH with Renzo and holding pzETH face primarily two types of risks: smart contract risk and slashing risk. Smart contract risk refers to potential vulnerabilities in the underlying code that could be exploited. Slashing risk pertains to penalties imposed by the underlying restaking protocols if validators act maliciously or perform poorly. Renzo mitigates slashing risk by partnering with institutional-grade node operators, who often have insurance policies in place, providing an additional layer of security against potential losses.