Exclusive Interview with Renzo Founder: We Believe Everything Will Return to Ethereum

Interview: Peng SUN, Kean, Foresight News

"The next cycle is still Ethereum," said Lucas Kozinski, founder of Renzo, firmly during an interview with Foresight News. Although there hasn't been explosive growth in current Web3 applications, Lucas believes that the reduction in Rollup costs and the upcoming AVS services launching on EigenLayer have created possibilities for an explosion at the application layer.

The Renzo team is quite different from what we might imagine. You may have seen their $3 billion TVL, or their investments from VCs like Binance Labs, Maven11, OKX Ventures, and IOSG, but these are just the shiny surface.

The Restaking narrative began to gain momentum in January 2024, but Renzo was the first LRT protocol to launch back in December last year. Although the three founders are seasoned veterans in the crypto space, Renzo can be described as starting from scratch and facing many challenges. They began their entrepreneurial journey last summer, relying entirely on their own funds until they met Maven11 in Turkey in November, with no one receiving a salary. This is the second LRT project I've heard of this year that couldn't pay salaries for several months last year, and both have received investments from Binance Labs this year.

The survivor bias in the crypto industry is always significant, but Renzo's success is not accidental. When you open the Renzo website, you'll find that it integrates with many DeFi protocols and Layer2 networks, reflecting Renzo's three-step strategy in pursuit of liquidity, efficiency, and risk management. "We will start from the Ethereum mainnet, expand to L2, and then enter decentralized exchanges from L2, integrating with CEXs, so users will eventually be able to buy and hold ezETH on Coinbase, OKX, and Binance," Lucas envisions, "ezETH will be everywhere."

Modularity presents challenges for Ethereum, but Lucas sees it as a game of addition rather than a zero-sum game. As EigenLayer's AVS launches, reducing developers' costs on Ethereum and allowing for shared economic security of the Ethereum mainnet, "everything will return to Ethereum."

1. The Entrepreneurial Journey of Seasoned Veterans in Crypto

Foresight News: Thank you for accepting the interview with Foresight News. Please introduce yourself and your team, as well as your experiences in the crypto industry.

Lucas Kozinski: Renzo has three founders: myself, James Poole, and Kratik Lodha. We all have 6 to 7 years of full-time experience in Web3. James has been a full-time engineering lead since 2016, I joined Web3 full-time in 2017, and Kratik Lodha is our research and product lead, entering the field in 2018.

I was born in Poland and moved to New York with my family when I was five. I first got into trading cryptocurrencies in 2014, but the Mt. Gox incident caused me significant losses. At the end of 2016, I re-entered the space and experienced the bull market from 2016 to 2017. In early 2018, I joined the Tezos Foundation as a project lead, and in early 2020, I joined Tokensoft as the Chief Strategy Officer and COO.

At the end of 2021, I left Tokensoft to become the founder of Moonwell. This is a lending protocol we launched on Moonbeam and Polkadot's Kusama, which remains the largest DeFi protocol on Polkadot and the largest mining protocol on Base.

Kratik previously worked at Woodstock Fund, which invested in Moonwell, and that's how we met. Last May, Kratik left Woodstock, and I also left Moonwell in May. After that, until July, we began discussing launching a project on EigenLayer. In August, James joined us as the third founding member, so we started building Renzo last summer.

Foresight News: It's great to see how far you've come. Why did you choose the Restaking track, and what motivated you to create Renzo? What kind of project do you hope Renzo will become?**

Lucas Kozinski: I am very excited about developing on EigenLayer because it's the first time I've noticed an open market in the Web3 space. The importance of an open market lies in its allowance for open innovation and competition.

Historically, when new ecosystems launch, foundations typically do two things: they either choose or build relationships with projects they want to position well in the ecosystem and then grant them liquidity rewards. This structure has some dilemmas, primarily the difficulty of innovation, where only top projects can secure liquidity and funding. With EigenLayer as an open market, there won't be a situation where foundations only provide liquidity incentives for DeFi protocols. EigenLayer will allow for innovation; whoever captures market share first, has the safest liquidity and distribution channels, and is most efficient will be the ultimate winner.

Moreover, as long as complexity and fragmentation exist, we have the opportunity to create value for users. Therefore, when you consider the relationship between EigenLayer and all AVS and operators, you'll realize it brings a whole new ecosystem and tech stack. By solving these issues and improving user efficiency, we have many opportunities to add value.

Foresight News: What is the structure of the Renzo team? Where is everyone located, and how do you collaborate?**

Lucas Kozinski: Renzo currently has 15 members, and we are growing very quickly. Since December, our team has doubled in size. Most members of Renzo are people we have known for many years and have worked with before, which is very important because this team is self-organizing. Therefore, while other projects may have only a CEO or leader making decisions, Renzo is quite unique; it is a decentralized collective. We have industry OGs who entered the space in 2016 and 2017, and they are very professional and highly efficient. If there were a CEO or leader managing daily operations, we believe it would easily create bottlenecks and hinder rapid growth.

Currently, Renzo has three departments: the engineering department has 10 full-time engineers, the product and research department has two people, and the BD marketing and operations department has three people. We established a foundation from the beginning, and most members are compensated directly from the foundation; they are all foundation members.

We are distributed globally, with four people in India, one each in Hong Kong, Australia, and Budapest, and several in the United States. This is a completely decentralized team. We have a sync meeting every Monday morning to align opinions and discuss issues each member encounters. The team then self-organizes for the following week since everyone is in different time zones. At the start of each workday, they write down their tasks and any issues they encounter on Slack. Half an hour before the end of the workday, they do a brief summary so we know they are about to clock out.

Foresight News: What do you think has been the biggest resistance or difficulty you've encountered in your entrepreneurial journey with Renzo?**

Lucas Kozinski: The most challenging moment was actually when we first started building and operating. At that time, no one really understood what Renzo was, and they thought the total market size was not large enough and didn't see any value. So for a long time, we struggled without investors, a community, or a product. But that was precisely Renzo's advantage and the reason for its success.

Due to the pressures and struggles of last year, we did encounter difficulties in funding. It wasn't until November that we met Maven11 in Turkey. The culture at Renzo is very humble; we were completely self-sufficient and managed to ensure that we used our funds wisely, enduring several months without salaries. Everyone was working voluntarily, essentially using their own money to push Renzo into the market.

It's hard to imagine how difficult this was, especially when you have to start from scratch, from having nothing to seeking funding, to achieving what we have today. But we learned how to work under pressure; we have a survival instinct, are daring and competitive, and can quickly adjust our strategic direction. We launched our product on December 18, and within 13 weeks, we achieved over $2 billion in TVL, becoming the fastest-growing liquid restaking protocol and a top EigenLayer project.

2. Renzo's Three-Step Strategy: Liquidity, Efficiency, and Risk Management

Foresight News: Please introduce Renzo's current main products and business progress.**

Lucas Kozinski: Renzo's plan is divided into three phases. The first phase is to increase liquidity and allocate liquidity; the second phase is to improve efficiency; and the third phase is to build a portfolio risk management system. These three phases will take about one to one and a half years.

Renzo is currently in the first phase, focusing on TVL and DeFi integration. In 13 weeks, Renzo has integrated with over 50 DeFi protocols and launched native restaking on five Layer2s: BNB Chain, Mode, Linea, and Blast, with three more coming soon. Historically, those projects that excelled in liquidity distribution captured significant market share through liquidity allocation and integration, earning users' trust. Without better products or higher yields, it is difficult for other projects to enter the market. If Renzo has high yields, it means the cost for other projects to come in and capture market share will be high. Secondly, we know that liquidity is king. Whoever has the strongest liquidity and highest integration will achieve the broadest adoption. In fact, Renzo has very strict requirements for liquidity; we can provide Chainlink price feeds, which no other LRT protocol can offer. The market has always focused on TVL as a leading indicator, while we measure who is first based on liquidity and DeFi integration.

The second phase is efficiency. EigenLayer is very complex; it operates on the Ethereum mainnet, and every transaction incurs gas costs, which significantly reduces yields and lowers returns for stakers. This is what we refer to as efficiency. Next month, AVS will start launching on EigenLayer, providing an efficient solution to return rewards generated by AVS to stakers. Traditional LST protocols find it difficult to scale when transitioning to LRT protocols, but Renzo can capture rewards and efficiently return them to our stakers.

The third phase will involve building portfolios once AVS enables the "Slashing" feature in the next 6 to 12 months. We have also been collaborating with companies like Gauntlet for over three years, helping us establish some risk and portfolio construction frameworks.

Foresight News: You have supported networks like Arbitrum, Linea, Mode, Blast, and BNB Chain in a short time. What considerations led to this?**

Lucas Kozinski: The yields for ETH holders come from the Ethereum mainnet, and users will cross-chain to the Ethereum mainnet for arbitrage. If we do not support these networks, Layer2 users and TVL will drain away. Renzo migrates Restaking to L2, allowing users to continue natively restaking on Arbitrum, BNB Chain, Linea, Mode, and Blast with lower gas fees, providing the same DeFi integration as the Ethereum mainnet. Renzo will bridge these ETH to the Ethereum mainnet, contributing to the economic shared security of EigenLayer.

Foresight News: Renzo is the first Restaking project launched after EigenLayer. What distinguishes Renzo from its competitors? What are its biggest advantages in terms of technology, product, and market?**

Lucas Kozinski: We are the first Restaking project built entirely from scratch, with a new team, new investors, a new community, new TVL, and new integrations. Renzo does not have an LST token but can provide native ETH yields. The difference is that we do not need to issue notes for the floating portion; that technology is outdated.

Most importantly, Renzo adopts a single-token model rather than a dual-token model. We do not have Rebase or Reward-Bearing tokens, and we do not need to improve efficiency through LST and LRT tokens. Renzo has excellent scalability, with no fragmentation in integration and high liquidity. Fundamentally, we have an efficient and clean tech stack that can effectively protect AVS and return these rewards to our users with lower risk.

Foresight News: Many projects in the Restaking space are focused on deposit and point accumulation, but liquidity is crucial for public chains, DeFi, and LRT. As an LRT asset, what utilities does ezETH have? What future application scenarios are there? Will there be various DeFi applications built on Renzo/ezETH?**

Lucas Kozinski: The ETH restaking market has already determined that ezETH is the most liquid asset, and ezETH will integrate with many protocols, with use cases and adoption rates gradually increasing. What excites us is the decrease in Rollup costs, which will lead to explosive growth in Rollups and L2s on Ethereum. Now we must build the entire ecosystem, integrate with more projects, and expand our use cases. In the future, there will definitely be many customized Rollups focused on DeFi or user applications. Just like today's AltLayer, you can launch a Rollup in 3 to 5 days. These Rollups will use LRT, especially using ezETH as their gas token.

Foresight News: Recently, you partnered with Polyhedra Network to provide $1.8 billion in crypto-economic security for its Bitcoin interoperability protocol. Can you elaborate on how you plan to expand into the Bitcoin ecosystem?**

Lucas Kozinski: Renzo will focus on securing Bitcoin services and providing them with economic guarantees. Projects like Babylon have attracted a lot of interest, and Renzo will serve as the restaking token for these ecosystems. We are having many discussions, but there are currently no commitments. However, these conversations are ongoing, and relationships are being built.

Foresight News: Cobo previously published an article introducing "Risks and Best Practices for EigenLayer Restaking," mentioning that current Restaking protocols face contract risks, LST risks, and withdrawal risks. How does Renzo manage and protect user assets?**

Lucas Kozinski: Like any other DeFi protocol, I always ensure that community members are aware of the risks associated with defaults. From day one, Renzo has hired an auditor and open-sourced its smart contracts, with every contract upgrade being re-audited. We launched an Immunefi bug bounty program and use institutional-grade node operators. Renzo also employs on-chain monitoring services like Hexagate to identify malicious activities. If there is any suspicious activity on-chain, deposits will be automatically paused, and withdrawals will be quickly halted.

We have been very cautious and have gradually introduced new features and risks. Withdrawals are currently disabled because Renzo has only been live for 14 weeks, and EigenLayer is still deployed on the M1 contract, upgrading to the M2 contract to prepare for the AVS mainnet. All other withdrawal protocol changes have a 10-day time lock, and contracts must now be upgraded, including withdrawal logic, re-auditing, and then enabling it on the mainnet.

Because we must update the code again and introduce additional risks, Renzo strategically decided not to enable withdrawals for the M1 contract for the time being. Although the team is ready for withdrawals, we are still waiting for EigenLayer so that Renzo can start protecting AVS, after which we will enable withdrawals on both contracts. However, there will be a cooling-off period for withdrawals, allowing Renzo to identify any vulnerabilities or malicious attackers. If issues arise, the Renzo protocol, foundation, and DAO will be able to pause withdrawals.

3. "We believe everything will return to Ethereum"

Foresight News: What is Renzo's roadmap and future plans for 2024?**

Lucas Kozinski: First, we will integrate more DeFi on the mainnet. Renzo is the first LRT protocol, and lending protocols like Compound, Aave, and Morpho have proposed governance proposals to use ezETH as collateral. Renzo will also collaborate with MakerDAO to use ezETH as collateral for DAI.

At the same time, ezETH will expand to X Layer, BNB Chain, and other exchange public chains, integrating with CEXs, so users will eventually be able to buy and hold ezETH on Coinbase, OKX, and Binance. This is our goal: starting from the Ethereum mainnet, expanding to L2, and then entering decentralized exchanges from L2. This will not only open up many new products and integrations for retail users on centralized exchanges but also ensure that Coinbase Prime, OKX, and Binance support Renzo. In the future, Renzo will also integrate with Fireblocks, Ankr, Ledger, Metamask, and wallets like Binance Web3, OKX Web3, and Coinbase wallets.

Secondly, Renzo will begin providing protection for AVS, with about 60 AVS currently preparing to launch on EigenLayer. Whether you hold ezETH in a self-custody wallet, an exchange, or elsewhere, you will benefit from EigenLayer and airdrops. After AVS launches various points systems, ezETH will be ubiquitous, and airdrops and real rewards will form a permanent incentive loop as ezETH accumulates.

Third, Renzo will truly focus on governance, portfolio, and risk management for EigenLayer, which may continue until the end of the year. We will look for new L2 opportunities and collaborate with ecosystem projects to ensure ezETH is settled as a gas token across different chains. For users, you can deposit wrapped ETH on the Renzo app without worrying about becoming an LP on DEXs or lending protocols, allowing you to access new yield opportunities with one click.

Foresight News: Renzo has not yet disclosed any information about tokens. Can you share some details? For example, how long will the current points activities last? What functions will the Renzo token have?**

Lucas Kozinski: I can't reveal too much here; we try not to set expectations for the community. As I just mentioned, ezETH will be everywhere, and its uses will be numerous. Renzo's overall goal is to make ezETH accessible to everyone and allow free staking of ezETH. I can't set a deadline for the duration of the activities, but Web3 changes too quickly, and I think one common mistake project teams make is misleading community members and doing things they might not be able to achieve.

Foresight News: What risks and opportunities do modular blockchains like Celestia bring to Ethereum?**

Lucas Kozinski: We are seeing more narratives around Restaking and modularity, and they are receiving more attention. I believe their adoption rates will be higher, and the possibilities for future use cases will also increase. As Renzo matures, DAOs will have the opportunity to figure out what this actually means and what risks they are willing to take, which fundamentally is not a zero-sum game. The larger the Restaking narrative, the more opportunities everyone in the ecosystem has to grow the pie and share in the benefits.

Foresight News: Where do you think the value support for Restaking lies? What innovations and challenges will the Restaking track face in the future?**

Lucas Kozinski: Let's first talk about the challenges. First, this is a very complex ecosystem. As more projects build in the Restaking space, there will be more fragmentation and changes. Renzo is closely working with EigenLayer operators and AVS to address these issues. For Renzo, this means more opportunities to improve efficiency and capture value for stakers. So the biggest challenge is how to simplify things? And how to abstract all the complexities for users, as that is where the value lies, and it's also what excites us.

I believe the next cycle will still be Ethereum. Of course, when you talk about Ethereum now, you think of Rollups, Base, or large DeFi ecosystems. But what we haven't seen in Web3 is the explosive growth of real applications that users want to use. People generally do not consider blockchain as the underlying settlement layer for transactions because the costs are too high, but Restaking or Rollups can solve this problem. We will bring a lot of innovation, even though we don't even know what kind of services or applications people want to launch. But fundamentally, they will be easy and cheap to launch on L2 and L3. The new cycle will see many customized applications launching, and they will require new AVS services. The applications that AVS is launching will not only bring additional yields and reward opportunities for Renzo holders but will also extend to other ecosystems.

We believe everything will return to Ethereum. Currently, the transaction costs on Base are lower than those on Solana, and it is completely decentralized. But I think there is one more thing you must address: user experience. If you are an Ethereum developer, you no longer need to invest tens of millions of dollars in infrastructure; just focus on creating user-facing products.