Renzo Updates Airdrop Terms After Explosive ezETH Depeg

Renzo, the second-largest liquid restaking protocol with $3.23 billion in TVL, made changes to allocations for its forthcoming REZ airdrop following community pushback and a recent violent depeg event.

In an April 24 tweet, Renzo announced it will move the claim date forward for its airdrop, increase its allocation to Season 1 ezPoints holders, and expand the number of wallets eligible to claim.

Points holders will now be able to claim their tokens one hour before Binance Launchpool participants on April 30 after originally being scheduled for May 2, with the tokens allocated to Season 1 of its points campaign increasing to 7% from 5% — also upping the tokens earmarked for both seasons of its point campaign to 12% from 10% and its overall community allocation to 32% from 30%. Binance Launchpool will still receive 2.5% of the token’s supply.

“The Renzo team acknowledges feedback and the importance of our community, who has made Renzo the leading restaking protocol,” Renzo said.

Renzo added that wallets holding at least 360 ezPoints will qualify for the airdrop, meaning 99% of points holders are included in the event. Half of the tokens allotted to whales holding more than 50,000 ezPoints will also vest over three months.

Depeg

The news comes after Renzo’s liquid restaking token, ezETH, suffered a violent depeg as farming for the first season of its points campaign came to a close earlier on the same day. EzETH abruptly tumbled more than 70%, wiping out many degens farming points via leverage in the process.

Gytis Trilikauskis, the COO of MEV Capital, told The Defiant that the depeg was fuelled by farmers moving to offload their ezETH holdings as inaccurate interpretations of the project’s airdrop allocation spread across social media.

“A misunderstanding of the airdrop pie chart of Renzo documentation [informed] threads wrongly mentioning that only 2.5% of $REZ supply would be given away to early contributors,” Trilikauskis said. “Some ezETH restakers decided to sell ezETH holdings on secondary markets as a reaction.”

Trilikauskis added that Renzo’s decision not to enable ezETH redemptions until after its token generation event exacerbated the degen by giving holders seeking to unwind exposure no option other than to sell on secondary exchanges. He noted that the depeg was further intensified by the majority of available liquidity residing within a single pool on the Balancer decentralized exchange.

“If redemptions for ezETH were already in place, the selling pressure would have been significantly lower and the peg would have remained intact,” Trilikauskis said.

Renzo is expected to enable ezETH redemptions in roughly four weeks’ time once ongoing code audits have been completed.

Trilikauskis added that MEV Capital remains “fully confident” in Renzo’s ability to deploy its redemption module, and is now purchasing ezETH to capitalize on its 2% discount relative to Ether.