The ezETH token from Renzo’s liquid restaking protocol has lost its peg to Ethereum. On Uniswap v3, the rate momentarily plummeted nearly 80% against ETH.
Aggregators did not record such a significant depeg. According to CoinGecko, at its peak, it did not reach even 3%. At the time of writing, the disparity remains at about this level.
The day before, Binance Labs, which supports the project, published the distribution plan for the governance token REZ. It was proposed that out of the total 10 billion issuance, the initial market circulation would be 1.05 billion. Of this amount, 10.5 million (10%) are allocated for an airdrop, which will occur in two seasons in equal shares.
A user named Tommy speculated that the sell-off might have been triggered by the end of the first phase of the token distribution. Some traders chose to exit their positions in the protocol, he suggested.
An objective analysis on what happened on @RenzoProtocol (Depeg, airdrop, token pie chart)
0) Overview
Renzo is the second largest LRT with 1mn ETH staked, 33.5% market share (Etherfi has 37.9% share)Renzo announced it’s token $REZ and airdrop plan on Apr 23, together with… pic.twitter.com/HNh1nQHVRv
— Tommy (@0xtommy_eth) April 24, 2024
Among additional factors that might have contributed to the asset’s “dump,” Tommy highlighted the following:
- BNB stakers will have the opportunity to sell their tokens on Binance Launchpool two days earlier than ezETH holders;
- part of the REZ from the airdrop is intended for NFT holders from Milady and SchizoPosters, unrelated to the protocol, raising concerns about insider trading;
- the Renzo team confirmed before distribution that the airdrop is based solely on points — alleviating concerns about selling ezETH;
- the airdrop volume was smaller than expected.
Tommy also noted that the published pie charts with distorted share values could have been misleading. One suggested that developers, venture investors, and advisors would control 66% of the REZ issuance.
Following negative community feedback, the Renzo team amended the token distribution terms. The community’s share increased from 30% to 32%, and the airdrop from 10% to 12%. Additionally, the priority shifted in favor of the first season: from 50% of the distribution volume to 70%.
After the recent backlash, Renzo Protocol has updated its airdrop terms.
? Allocation changes:
• Community from 30% to 32%
• Airdrop from 10% to 12%
• Season 1 from 5% to 7% of total supply✨ Eligibility and unlocking changes:
• Minimum 360 ezPoints
• Full TGE unlock for… pic.twitter.com/R1pEyxrwND— Airdrop Official ?? (@its_airdrop) April 25, 2024
According to DeFi Llama, the value of assets locked in the EigenLayer-based protocol is approximately $3.2 billion.
Back in January, Renzo raised $3.2 million in a seed funding round.