- Renzo Protocol’s restaked Ether token, EZETH, experienced a significant price depeg on April 24 after it’s airdrop campaign, causing a temporary drop in its value on the Uniswap decentralized exchange.
Renzo Protocol‘s restaked Ether token, EZETH, experienced a significant price depeg on April 24, causing a temporary drop in its value on the Uniswap decentralized exchange.
The token’s price briefly fell to a low of $688 before recovering and returning to its price parity with Ethereum (ETH).
The depegging incident appears to be a result of a broader sell-off triggered by the conclusion of Renzo Protocol’s season 1 airdrop.
Instances of depegging incidents like this have become a common challenge for LRTs. The temporary imbalance in DEX pools can lead to a depeg, even if withdrawals are enabled.
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This depegging event resulted in significant liquidations on leveraged platforms such as Gearbox and Morpho Labs, where users who repeatedly utilize LRTs as collateral for borrowing ETH faced substantial losses.
Renzo Protocol is currently the second-largest liquid restaking protocol, with a total value locked (TVL) of over $3.3 billion, representing a 126% increase in the past month.
The largest liquid restaking protocol is Ether.fi, with a TVL of over $3.9 billion, according to DefiLlama.
Renzo Protocol has gained considerable attention recently, particularly after its incoming token, REZ, was added to the Binance launchpool on April 23.
On the same day, the protocol announced an incoming airdrop, allocating 10% of its token distribution to season 1 participants.
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