Renzo’s ezETH Decouples from Peg at $688 After Conclusion of Airdrop Farming Period

Renzo Protocol’s restaked Ether token (EZETH) experienced a price depegging event on April 24.
During this incident, the token’s price briefly dropped to a low of $688 on the Uniswap decentralized exchange before recovering its price parity with Ether (ETH), as reported by Dexscreener data.
The depegging is believed to have been triggered by a broader sell-off following the conclusion of Renzo Protocol’s season 1 airdrop, according to pseudonymous crypto analyst Tommy, who shared this information in an X post on April 24.
Renzo is currently the second-largest liquid restaking protocol, with a total value locked (TVL) of over $3.3 billion, which has increased by 126% over the past month. The largest liquid restaking protocol is Ether.fi, with a TVL of over $3.9 billion, according to DefiLlama.
According to the popular crypto analyst, similar depegging incidents are becoming a common challenge for liquid restaking tokens (LRTs).
The depegging event resulted in mass liquidations on leveraged protocols such as Gearbox and Morpho Labs. Loopers, or users who repeatedly use LRTs as collateral to borrow ETH for leverage, suffered significant losses during this incident, as stated by the analyst.
Renzo Protocol has generated heightened interest after its upcoming token (REZ) was added to the Binance launch pool on April 23, the same day the protocol announced its upcoming airdrop. Renzo allocated 10% of its token allocation to the season 1 airdrop.
In related news, crypto trader czsamsunsb.eth earned a profit of 121.65 ETH, equivalent to over $396,000, within a span of just two hours following Renzo’s depegging incident. This information was shared by on-chain intelligence firm Lookonchain in an X post on April 24.
According to Lookonchain, czsamsunsb.eth’s trading history supports this profitable outcome.
An analyst warns that “money-hungry VCs” can have detrimental effects on token launches in the long term.