Ether.Fi Inks $500M Restaking Deal With RedStone Oracles

RedStone Oracles, which provides data feeds for blockchains, is among a growing field of “actively validated services” (AVSs) waiting to tap into EigenLayer, the buzzy new “restaking” protocol that lets upstart networks borrow Ethereum’s security. On Friday, RedStone announced that it had sealed a $500 million deal with Ether.Fi, the largest liquid restaking service on EigenLayer, to help power its oracle protocol.

EigenLayer deployed a limited version of its service to Ethereum’s mainnet earlier this week, boasting more than $12 billion in user deposits – many of them from liquid restaking middlemen like Ether.Fi that aim to make the deposit process easier (and more lucrative) for end-users.

The billions of dollars in restaked deposits are set to play a lead role in the EigenLayer’s “pooled security” system, which lets operators “delegate” their stake to help power specific AVSs.

Under its deal with RedStone, Ether.Fi will dedicate $500 million to help secure RedStone’s data oracles, which are used to pass information between blockchains and the outside world.

“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 companies said in a joint statement, “The restaked Ether will serve as a safeguard against both liveness failures and crypto-economic attacks within the network of RedStone’s node providers.”

Liquid restaking services funnel user deposits into EigenLayer and offer extra rewards on top, along with tradeable “liquid restaking tokens” that represent a user’s underlying investment. Ether.fi has $3.8 billion locked up with EigenLayer – assets that will eventually help power the pooled security system. In return for deposits, Ether.fi grants users a derivative token, Ether.Fi ETH (eETH), which earns interest and can be traded in decentralized finance (DeFi).

Redstone isn’t the first AVS to make a deal with Ether.fi. A similar agreement was announced in March, with Ether.Fi committing $600 million worth of its stake to Omni, an AVS network designed to help layer 2 rollups communicate with each other.

EigenLayer’s has racked up over $15 billion in deposits in total, but the version live on Ethereum’s mainnet is still lacking several core features. The only AVS that has been allowed to deploy onto the network so far has been EigenDA, a data availability service from Eigen Labs, the team behind EigenLayer.

AVS networks like Redstone Oracles are allowed to “register” with EigenLayer but will not be allowed to deploy onto the service until some time later this year, according to estimates from Eigen Labs.