Renzo's ezETH depegs 18.3% following REZ tokenomics announcement on Binance
Quick Take
- Renzo’s liquid restaking token ezETH fell dramatically within the past 24 hours.
- The token fell over 18% within minutes before ultimately recovering. However, it still trades below ether.
- The depeg was likely due to users wanting to exit ezETH after learning more about the REZ token’s confusing distribution plan.
Renzo's Ethereum-pegged asset ezETH depegged significantly within the past 24 hours, data from The Block show.
ezETH dipped 18.3% to about $2,642 within the matter of minutes, with some crypto data trackers depicting ezETH fall to around $700. The token largely recovered since the depeg, but still dropped 5.6% within the past 24 hours to trade hands $3,077 at 12:40 p.m. ET.
Price performance of ezETH on April 24. Image: The Block Prices
ezETH is a liquid restaking token (LRT) from the liquid restaking protocol Renzo. Users earn ezETH by restaking ether or another liquid staking token on the platform. As such, ezETH is supposed to maintain equal worth with ether.
Ethereum was valued at $3,179 at 12:42 p.m. ET on April 24, The Block's Ethereum Price Page shows.
What happened
Binance Labs, the crypto venture arm of the crypto exchange giant Binance, announced yesterday the token distribution plan for REZ, Renzo's governance token. Of the 10 billion total token supply and 1.05 billion circulating supply, 10% of that REZ (105 million) would go to airdrops. Half of that 10% would go to a season 1 airdrop.
As an X user who goes by Tommy explains, Binance stakers using Launchpool would have had an opportunity to sell their tokens before ezETH holders. So a sell-off occurred due to buyers wanting to exit ezETH, with users likely wanting to recover ETH to farm other liquid restaking tokens after learning about the REZ airdrop details. Binance Launchpool allows users to stake tokens and earn rewards.
Additionally, Renzo depicted other token distribution allotments with disproportionately sized pie chart slices, users noted on X, which caused confusion as to how many REZ tokens were going where. When corrected for size, the pie chart actually depicted over 60% of the tokens going to the team, investors and advisors.
Renzo would have also airdropped tokens to NFT holders of collections unrelated to the protocol, raising concerns of insider trading, Tommy adds.
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