In a collaboration with RedStone, Ether.Fi commits $500 million to enhance the security of RedStone's data oracles, essential for transmitting information between blockchains and external systems.

RedStone Oracles, a provider of data feeds for blockchains, falls under the category of "actively validated services" (AVSs) eager to leverage EigenLayer, a revolutionary "restaking" protocol enabling emerging networks to leverage Ethereum's security. The recent partnership announcement by RedStone revealed a substantial $500 million pact with Ether.Fi, the leading liquid restaking service on EigenLayer, to bolster the functionality of its oracle protocol.

With EigenLayer introducing a preliminary version of its service on Ethereum's mainnet, attracting over $12 billion in user deposits; contributing significantly to this number are liquid restaking intermediaries like Ether.Fi simplifying and optimizing the deposit process for end-users.

These restaked funds are pivotal in EigenLayer's "pooled security" mechanism, empowering operators to "delegate" their stake towards supporting specific AVSs. Ether.Fi's agreement with RedStone involves allocating $500 million to fortify RedStone's critical data oracles facilitating seamless communication between blockchains and external networks.

The partnership dictates that over 20,000 node operators from Ether.fi will oversee RedStone's Actively Validated Service (AVS), utilizing Ether.fi's proprietary liquid restaking token, eETH. This restaked Ether will act as a protective barrier against both technical issues and potential attacks within RedStone's network of node providers, ensuring robust and reliable operations.

Through liquid restaking services, user deposits are channeled into EigenLayer, offering additional incentives in the form of tradable "liquid restaking tokens," representing the user's initial investment. Ether.fi's substantial $3.8 billion deposited with EigenLayer will play a significant role in fueling the pooled security mechanism, providing users with Ether.Fi ETH (eETH) tokens that earn interest and can be utilized in decentralized finance (DeFi) trading.

This collaboration with RedStone marks another strategic move for Ether.fi, following a similar $600 million commitment to Omni, an AVS designed to facilitate communication between layer 2 rollups. While EigenLayer has amassed a total of over $15 billion in deposits, the current version on Ethereum's mainnet lacks certain core functionalities. Although AVS networks like Redstone Oracles are registered with EigenLayer, they are not yet permitted to deploy onto the service, with deployment anticipated later this year as indicated by Eigen Labs projections.