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EigenLayer restaker ether.fi closes $500M deal with RedStone Oracles

Abstract representation of a restaking protocol merging with a blockhain oracle, signifying the deal between ether.fi and RedStone Oracles.

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EigenLayer-based liquid restaking protocol ether.fi and RedStone Oracles, a provider of data feeds for blockchains, have announced the finalization of a $500 million restaking agreement.

Under the terms of the deal, ether.fi will allocate $500 million to help secure RedStone’s data oracles, which are designed to facilitate information exchange between blockchains as well as from external data sources.

RedStone Oracles is one of several “actively validated services” (AVSs) that utilize EigenLayer, a recently launched “restaking” protocol that allows emerging networks to leverage Ethereum’s security architecture. EigenLayer deployed a limited version of its service to Ethereum’s mainnet on April 9th, claiming to have attracted more than $12 billion in user deposits, with a significant portion coming from liquid restaking intermediaries like ether.fi.

According to a joint statement from the companies, a subset of over 20,000 node operators from ether.fi will manage RedStone’s AVS and employ ether.fi’s native liquid restaking token, eETH. The statement claims that the restaked Ether will serve as a safeguard against both liveness failures and crypto-economic attacks within RedStone’s network of node providers.

Liquid restaking services, such as ether.fi, channel user deposits into EigenLayer and offer additional rewards, along with tradeable “liquid restaking tokens” that represent a user’s underlying investment. ether.fi claims to have $3.8 billion locked up with EigenLayer, which will eventually contribute to the pooled security system.

This is not the first AVS deal announced by ether.fi. In March, the company reportedly committed $600 million worth of its stake to Omni, an AVS network designed to facilitate communication between layer 2 rollups.

EigenLayer claims to have accumulated over $15 billion in deposits in total. However, the version currently live on Ethereum’s mainnet is still missing several core features. To date, the only AVS allowed to deploy onto the network has been EigenDA, a data availability service developed by Eigen Labs, the team behind EigenLayer.

AVS networks like Redstone Oracles can register with EigenLayer but will not be permitted to deploy onto the service until later this year, based on estimates provided by Eigen Labs.

Note: This article was produced with the assistance of AI, specifically Claude 3 Opus for text and OpenAI’s GPT-4 for images. The editor has extensively revised the content to adhere to journalism standards for objectivity and neutrality.

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