Renzo’s ezETH drops to $688 after airdrop farm window expires.
Renzo Protocol's recaptured Ether Token (EZETH) experienced a price spike on April 24.
The depegging incident saw the token's price briefly drop to $688 on Uniswap's decentralized exchange before recovering its price comparison with Ether (ETH), according to Dexscreener data.
According to Tommy, an anonymous crypto analyst who wrote in an April 24 X post, Renzo Protocol Season 1's climactic conclusion to the event could be a sell-out.
“Probably sold due to conclusion of Chapter 1 Airdrop, users want to return $ETH to farm others. [liquid restaking tokens] LRT/Protocols.
Renzo has more than $3.3 billion in total value locked (TVL), up 126 percent last month. Ether.fi is the largest liquidity recovery protocol, with more than $3.9 billion in TVL, according to Defillama.
Similar hacking events are a growing pain for Liquidity Recovery Tokens (LRTs), according to a prominent crypto analyst.
“On DPEG, it's a risk we need to be aware of for all LRTs, even if the climb is enabled, the DX pool can easily be reduced based on temporary inconsistencies.”
According to the analyst, users who use protocols such as Gearbox and Morpho Labs to leverage bulk liquidity with loopers, or frequently use LRTs as collateral, are at a huge disadvantage to borrow ETH.
Renzo Protocol's revenue token (REZ) spurred a surge in interest after it was added to the Binance launch pool on April 23, the same day the protocol announced its upcoming airdrop.
Renzo has allocated 10% of the token allocation for the season 1 airdrop.
Related: Hong Kong Bitcoin and Ether ETF Officially Approved to Start Trading on April 30
Traders can earn about $400,000 in ezETH depeg in two hours
Crypto trader czsamsunsb.eth made a profit of 121.65 ETH, worth more than $396,000, within two hours of Renzo's disappearance, according to blockchain intelligence firm LukonChain, who wrote in an April 24 post:
“czsamsunsb.eth earned 121.65 $ETH in 2 hours after releasing $EZETH (Renzo Retaked ETH)! Spent $4,099 for a successful purchase of $4,221 and earned $121.65!”
Related: ‘Money-hungry VCs' are bad for long-term token startups – analyst
