By
Steve Muchoki
April 25th, 2024
Redstone Oracles is not the first AVS to strike such a deal with Ether.Fi.
Ether.Fi, the largest liquid restaking protocol on EigenLayer, has agreed to a whopping $500 million restaking deal with Redstone Oracles. With this deal, Ether.Fi will power RedStone’s oracle protocol which it uses to transfer information both on and off chain.
Redstone Oracles is a prime example of an “Actively Validated Service” (AVS) network. Like many other AVS networks, Redstone has been looking to tap into EigenLayer amid the buzz of its new “restaking” protocol.
Earlier this week, Coinspeaker reported that EigenLayer deployed a limited version of its service on Ethereum’s mainnet. While the protocol boasts over $12 billion in user deposits, a major portion of that came from liquid restaking middlemen like Ether.Fi.
Interestingly, that much restaked deposits give EigenLayer enough capacity to set the ball of its “pooled security” system rolling, thereby allowing operators to “delegate” their stake in order to power AVS networks.
The arrangement between Ether.Fi and Redstone, as it pertains to the new agreement, is contained in a joint statement issued by the duo. It reads:
“A subset of over 20,000 node operators from Ether.fi will manage RedStone’s Actively Validated Service (AVS) and employ Ether.fi’s native liquid restaking token – eETH.”
The statement also details how the “restaked Ether will serve as a safeguard against both liveness failures and crypto-economic attacks within the network of RedStone’s node providers”.
Ether.Fi’s Game-Changing Approach and Its Broader Implication on DeFi
It might be worth noting that Redstone isn’t the first AVS to strike such a deal with Ether.Fi. Just last month, Ether.Fi similarly committed $600 million worth of its stake to yet another AVS network Omni.
However, there is a reason why such agreements portray Ether.Fi’s commitment to enhancing the efficiency and scalability of DeFi protocols. These deals thrive on the concept of restaking, a process through which crypto assets are locked in smart contracts to support network operations and secure blockchain transactions.
For DeFi protocols, which have been severally tagged a haven for attackers and bad actors, that security feature that comes with restaking is a big deal. That is because the restaking model minimizes the risk of potential exploits or vulnerabilities within DeFi protocols.
So, as the Ethereum ecosystem continues to evolve, restaking emerges as a critical mechanism for enhancing network security and fostering sustainable growth in the DeFi sector.