Reasons
A lot of people are looking to dodge Ethereum Mainnet gas fees, but still want the benefits of a lot of mainnet decentralized finance. Honestly I cannot blame them. It costed me 0.02 Ether to remove liquidity from a liquidity pool the other day. Painful. Although gas fees have been on the rise on Layer 2 recently, barring the major upgrade slated for tomorrow, it is the most reasonable place to be if you want to keep your ether.
There are a multitude of security concerns for Layer 2, and for that reason many developers delay launch on Layer 2. This has produced many issues for Layer 2 users.
Before today, the only way to stake Ether from layer 2 is to accept the premium that many Liquid Staking Tokens have in liquidity pools.
| Lido Wrapped Staked Ether | +16.2% |
| Rocket pool Staked Ether | +9.5% |
| Staked Frax Ether | +7.5% |
These premiums against Ether, reduce the affordability of Liquid Staking for user.
Renzo to the Rescue
Finally, at least on Arbitrum and coming to other Layer 2's near you, you can mint a Liquid Restaking Token on Layer 2. This means users can get direct exposure to Liquid Staking with the added risk of Liquid Restaking.
I am by no means stating that this is a risk less protocol. There is a ton of risk. But it is an opportunity for an airdrop and by all means it is unique because it brings Staking & Restaking deposits to Layer 2.
