RedStone Oracles, a company offering data services for blockchains, is part of an expanding group of “actively validated services” (AVSs) aiming to leverage EigenLayer, the recently buzzed-about “restaking” protocol that enables less established networks to borrow Ethereum‘s security. On Friday, RedStone disclosed a $500 million partnership with Ether.Fi, the largest liquid restaking service on EigenLayer, to strengthen its oracle protocol.

This week, EigenLayer introduced a preliminary version of its service on Ethereum‘s primary network, showcasing over $12 billion in user deposits. A significant portion of these deposits originated from intermediaries like Ether.Fi, simplifying and increasing profits for users during the deposit process.

With billions of dollars in reinvested deposits, EigenLayer’s “pooled security” mechanism enables operators to assign their stake to support particular Automated Verifiable Systems (AVSs), contributing significantly to the system’s functionality.

Through their agreement with RedStone, Ether.Fi has committed to investing $500 million to ensure the security of RedStone’s data oracles. These oracles serve as bridges, transferring information from blockchains to the broader world.

Approximately 20,000 operators from Ether.fi are chosen to oversee RedStone’s Actively Validated Service (AVS). They will utilize Ether.fi’s built-in liquid staking token – eETH, the companies announced in a statement. The staked Ether acts as a shield against network disruptions and crypto-economic assaults instigated by RedStone’s node providers.
Ether.fi’s liquid staking service allows users to deposit assets into EigenLayer and receives bonuses, as well as “liquid staking tokens” that reflect their original investment. These tokens can be traded in the decentralized finance (DeFi) marketplace. Currently, Ether.fi holds approximately $3.8 billion worth of assets in partnership with EigenLayer, which will eventually support the collective security system. In exchange for deposits, Ether.fi issues users a derivative token called eETH, which accrues interest and can be used for trading purposes within DeFi.

An earlier deal between Ether.fi and a Different AVS (AVS being Automated VeCTOr Scaling) wasn’t the only one. In March, it was revealed that Ether.Fi pledged approximately $600 million of its stake towards Omni, an AVS network facilitating communication among layer 2 rollups.

EigenLayer’s aggregated deposits exceed $15 billion, yet its Ethereum mainnet version is still missing some essential features. So far, only one Approved Verifier System (AVS) has been authorized for deployment: EigenDA, a data availability service from the developers of EigenLayer.

According to Eigen Labs’ predictions, AVS networks similar to Redstone Oracles can sign up with EigenLayer now, but they won’t be able to launch their services until later in the year.

Read more: Omni Network Signs $600M Restaking Deal With Ether.Fi to Enhance Security

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2024-04-12 11:15