Exploring the benefits of restaking with Novum’s Liquid Restaking Token (novETH)
Decentralized Finance is witnessing a revival, propelled by the emergence of a novel asset class known as “liquid restaking tokens” or LRTs. The notion of restaking has captured the attention of cryptocurrency enthusiasts worldwide, leading to significant investments totaling billions of dollars in this sector.
Novum Finance aims to simplify the blooming restaking landscape, enhance rewards for restaked assets and increase DeFi accessibility. Central to this initiative is the creation of a unified liquid restaking token: novETH.
But what exactly are the benefits that novETH provide for restakers, node operators, and Autonomous Verification Systems (AVS) on Eigenlayer?
Let’s explore together.
Understanding LRT’s: Redefining DeFi Dynamics
A Liquid Restaking Token is a fungible token representing assets that have been restaked on Eigenlayer to secure AVS. Like LSTs, these tokens are liquid and can be used in DeFi markets.
Depositing capital into EigenLayer would make your funds illiquid. However, by depositing your ETH/LSTs via Novum’s restaking platform, you will receive an equivalent amount of novETH, ensuring that your capital continues to be restaked (earning rewards) on Eigenlayer while unlocking liquidity to invest in other opportunities.
Challenges associated with Eigenlayer restaking
Currently, restakers on Eigenlayer need to:
- Manually restake their tokens.
- Constantly monitor their positions.
- Pay high gas fees for withdrawals depending on their delegation strategies.
- Select or run their own operators for providing validation services to AVS’s.
- Conduct their own risk management.
- On top of that, their funds are illiquid.
Empowering Restakers: Maximizing Returns, Minimizing Effort
Novum Finance presents a paradigm shift in maximizing returns while minimizing efforts. Our ambition is to simplify the entire restaking process, and by doing so to provide several benefits to restakers:
- Earn the underlying ETH rewards from the ETH/LSTs restaked. novETH is a reward-bearing token that works similarly to cTokens. The underlying rewards accrued by restaking positions are reflected in the price of novETH over time as it increases in value.
- Save the effort in identifying the right services and validators — no need to run your own operator node.
- Receive EigenLayer points, which are rewards you would normally receive for directly depositing into EigenLayer. The point system will eventually be replaced by actual APY % once Eigenlayer releases the reward system.
- Earn Novum Points on top of the Eigenlayer points and potential future rewards from AVS’s (yield, airdrops).
- Keep your funds liquid by receiving novETH for your ETH/LST deposits and maximize the utility of your funds in the DeFi ecosystem.
Benefits for Node Operators
Node operators play a pivotal role in maintaining the integrity and security of AVS’s on Eigenlayer. Operator refers to any entity that operates a network validator. Novum will partner with a set of industry leading professional operators to run both ETH validators, and the validation services required by the set of AVS that Novum secures. Novum provides several benefits to operators:
- Save the effort in identifying the right services to valdiate (AVS’s).
- Reduce the effort to get restakers and restaked assets. Novum brings liquidity by aggregating user deposits and delegating those assets to partner operators.
- Help manage rewards that come in with Restaking automatically.
Benefits for Actively Validated Services
“AVS” or “Actively Validated Services” denote services deployed on EigenLayer that are secured by aggregated “restaked” collateral, such as natively staked ETH and/or LSTs. This acceptance comes with the condition that the restaker risks losing access to part or all of those funds if they fail in their validation responsibilities, governed by predefined rules known as slashing conditions.
By partnering with Novum, AVS’s unlock several benefits:
- AVS’s save efforts in identifying and partnering with Eigenlayer operators. Novum will work with a set of established and vetted operators chosen based on their experience, slashing history, AUM’s and more.
- Save efforts to bootstrap security. AVS’s leverage Novum’s network of opertators, staked assets and get access to Ethereum-grade security in no time. No need to build their own blockchain.
Conclusion: Embracing the Future of DeFi with Novum Finance
By introducing our Liquid Restaking Token (novETH), Novum Finance provides benefits to all ecosystem participants from restakers, node operators, and AVS’s. We’re still working actively on our testnet release and will keep you updated of the developments soon, so stay tuned!
If you want to get more information on how we plan to work with the different ecoystem participants, please read our documentation: https://novum.gitbook.io/novum-finance
If you are interested to know more, have any questions or want to collaborate, please feel free to reach out to us at contact@novumfinance.xyz.
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We’re looking forward to embarking on the restaking journey with you!
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