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 Binance Launchpool which consists of 2.5% of total $REZ supply
1) Depeg Incident
Few hours ago (~0400 UTC), there was a sell-off of Renzo's LRT - ezETH on DEX, ezETH price dropped to as low as ~US$700 before covering
Sell-off likely caused by the conclusion of Season 1 Airdrop, users want to get back $ETH to farm other LRT/protocols
This led to liquidation on leverage protocols such as @GearboxProtocol and @MorphoLabs. Loopers (users who repeatedly use LRT as collateral to borrow ETH to create leverage) suffered loss as a result
2) Airdrop
Renzo allocated 10% of $REZ for airdrop, Season 1 would be 5% of $REZ
Largest wallets will have 50% unlock at TGE, 50% vested over 6 months (no further detail yet)
NFT holders of Milady & SchizoPosters will get 2% of the 5% airdrop (0.1% of $REZ)
Fumes from community include:
- Binance Launchpool ends on Apr 29 and trading begins on Apr 30 vs. stakers who can only claim airdrop on May 2 -> i.e. Binance stakers can sell on the stakers two days early
- Rumour that if users sold their ezETH, they would not be entitled to the airdrop, team has clarified that it's not true in Discord, stating airdrop is completely based on points user have
- NFT holders with no contribution getting airdrop, and insider trading concern
- Airdrop ratio too small
3) Token allocation chart
In the $REZ announcement, Renzo included the following pie chart on token allocation
This is highly misleading as the size of each pie is completely off (the two 2.5% has the same size as 13.44% or 20%; 30% and 31.56% has the sum of half of the pie etc.), readers may underestimate the float project/VCs controlled by the looks of it
Renzo has deleted this tweet after
Below is the recreated pie chart with the correct ratio. However, it is still a little bit confusing as airdrop portion is not shown
The best is to look at Binance's version here, which clearly shows the percentage and category:
4) My take on this (subjective part)
- It is a mix of justified criticism/fud/frustration
- On the depeg, it is a risk that we need to recognize for all LRTs, even if withdrawal is enabled, DEX pool can still depeg simply based on the temporary imbalance
- On the airdrop, there are definitely things that can be improved, such as more transparency on how it is determined. Should also rethink whether airdropping to NFT holders that have no direct relationship with the protocol makes sense
- On pie chart, I tend to believe it is just a mistake by the designer and the lack of checking from the team. Don't think this kind of low level tricks will be able to mislead crypto-native users. But it did look bad regardless
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 Binance Launchpool which consists of 2.5% of total $REZ supply
1) Depeg Incident
Few hours ago (~0400 UTC), there was a sell-off of Renzo's LRT - ezETH on DEX, ezETH price dropped to as low as ~US$700 before covering
Sell-off likely caused by the conclusion of Season 1 Airdrop, users want to get back $ETH to farm other LRT/protocols
This led to liquidation on leverage protocols such as @GearboxProtocol and @MorphoLabs. Loopers (users who repeatedly use LRT as collateral to borrow ETH to create leverage) suffered loss as a result
2) Airdrop
Renzo allocated 10% of $REZ for airdrop, Season 1 would be 5% of $REZ
Largest wallets will have 50% unlock at TGE, 50% vested over 6 months (no further detail yet)
NFT holders of Milady & SchizoPosters will get 2% of the 5% airdrop (0.1% of $REZ)
Fumes from community include:
- Binance Launchpool ends on Apr 29 and trading begins on Apr 30 vs. stakers who can only claim airdrop on May 2 -> i.e. Binance stakers can sell on the stakers two days early
- Rumour that if users sold their ezETH, they would not be entitled to the airdrop, team has clarified that it's not true in Discord, stating airdrop is completely based on points user have
- NFT holders with no contribution getting airdrop, and insider trading concern
- Airdrop ratio too small
3) Token allocation chart
In the $REZ announcement, Renzo included the following pie chart on token allocation
This is highly misleading as the size of each pie is completely off (the two 2.5% has the same size as 13.44% or 20%; 30% and 31.56% has the sum of half of the pie etc.), readers may underestimate the float project/VCs controlled by the looks of it
Renzo has deleted this tweet after
Below is the recreated pie chart with the correct ratio. However, it is still a little bit confusing as airdrop portion is not shown
The best is to look at Binance's version here, which clearly shows the percentage and category:
4) My take on this (subjective part)
- It is a mix of justified criticism/fud/frustration
- On the depeg, it is a risk that we need to recognize for all LRTs, even if withdrawal is enabled, DEX pool can still depeg simply based on the temporary imbalance
- On the airdrop, there are definitely things that can be improved, such as more transparency on how it is determined. Should also rethink whether airdropping to NFT holders that have no direct relationship with the protocol makes sense
- On pie chart, I tend to believe it is just a mistake by the designer and the lack of checking from the team. Don't think this kind of low level tricks will be able to mislead crypto-native users. But it did look bad regardless
@RenzoProtocol Depeg risk applies to all LRTs, previously published an article on exactly this
https://x.com/0xtommy_eth/status/1771107526127521858
@RenzoProtocol Latest update on the $REZ airdrop
https://x.com/0xtommy_eth/status/1783333146458730667
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