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Howdy!

Sorry if today’s subject line gave you an aneurysm — we’re trying to connect more with our Gen Z readership. 

So uh, happy brat summer. Sharing Lightspeed with your friends and colleagues is very demure, very mindful. Anyways:

Renzo’s governance token is Solana-bound

Renzo, one of four liquid restaking protocols with at least $1 billion in TVL, is launching its REZ governance token on Solana, the team told Lightspeed exclusively.

REZ will reach Solana through Wormhole’s native token transfer framework, with plans to leverage Wormhole’s multichain governance system, MultiGov. The news comes shortly after Renzo announced the launch of ezSOL, a liquid restaking token designed to launch with Jito’s upcoming restaking platform, which is still in development.

Renzo is a liquid restaking token protocol meant to simplify restaking for Ethereum users. Users can deposit ETH or stETH to mint Renzo’s ezETH. This token accrues yield while abstracting away the complexities of restaking. Restaking involves using staked assets to secure additional applications and services.

Following its launch in December 2023, Renzo awarded points to restakers, culminating in an airdrop in late April. As is the case with many tokens distributed via airdrop, REZ’s price has fallen by about 75% since it first appeared on CoinGecko. 

Following the airdrop, the Renzo protocol started to see consistent outflows, according to DeFiLlama — presumably at least partly a result of airdrop farmers turning their attention elsewhere. By linking up with Jito and promising liquidity incentives and airdrops on Solana, perhaps Renzo is hoping to reverse its recent fortunes.

Head of marketing Diogo Costa said Renzo is a “blue chip restaking protocol” that “could see good TVL inflows as soon as deposits are live” on Jito. 

Renzo does think Jito is positioned to “capture the majority of market share” in Solana restaking because of its lucrative fee generation. Whether the sector will take off depends on NCNs — which are Jito’s equivalent of EigenLayer AVSs that make use of restaking security — having fees to share with restakers, Renzo founding contributor Lucas Kozinski told me. 

REZ’s utility comes from its usage as a governance token for the Renzo protocol, and the Solana deployment will place Renzo among the first protocols to try Wormhole’s MultiGov system. Essentially, DAOs no longer need to live on one blockchain. This will be particularly helpful for users who are “sensitive to high gas costs” given Solana’s cheap fees, Renzo founding contributor James Poole told me. 

Many of the Solana ecosystem tokens airdropped this year were meant as governance tokens, and it will be interesting to see how these newer protocols actually govern. 

Jito, as one example, has adopted the “one token, one vote” method that’s ascendent in the Ethereum ecosystem. Drift has cast its lot with MetaDAO and adopted a futarchy governance model where pass and fail markets determine if the protocol should fund things, alongside a more traditional DAO.

Now, with REZ and ezSOL coming to Solana, Renzo joins that conversation.

— Jack Kubinec

Blockworks Research is conducting a survey to gain insight into the institutional staking landscape. This data will help industry leaders adopt their strategies as the industry matures.

If you're an institutional staker, we want to hear from you (and if you’re new to Blockworks Research, get 20% off of our service while you’re at it!)

Flows can get ugly after TGE.

These are Renzo’s dollar flows since launch, according to DeFiLlama. As you can see, Renzo saw strong inflows right until around late April, when it airdropped REZ. In recent months, Renzo has seen pretty significant outflows.

A token airdrop is a card that protocols can only play once, and Renzo is one of several post-TGE protocols grappling with the challenge of maintaining liquidity. It will be interesting to watch whether the Solana integration can reverse these outflows and bring positive momentum back to the protocol.

— Jack Kubinec

— Jeffrey Albus

What’s the future of DeFi on Solana?

Catch the Lightspeed podcast live on stage at Permissionless to find out.

A message from Matt Fiebach, co-founder of Entropy Advisors: