Renzo Protocol’s ezETH Price Plunges Below $700 Following Airdrop Event

Key Takeaways

After the Season 1 airdrop of Renzo Protocol ended, the price of ezETH briefly dropped below Ethereum, reaching $688 before stabilizing;
The drop in ezETH price was a result of a large sell-off after the airdrop concluded;
Trader czsamsunsb.eth managed to profit from the depeg, earning 121.65 ETH ($380,000).

Follow the conclusion of its Season 1 airdrop, the restaked Ether token of Renzo Protocol, ezETH, experienced a temporary decrease in value compared to Ethereum (ETH).
On April 24, the token’s price fell to $688 on the Uniswap decentralized exchange before returning to its price parity with ETH.

Crypto analyst Tommy highlighted on X that this event underscores a common issue within liquid restaking tokens (LRTs), which, despite allowing withdrawals, can still undergo depegs due to temporary market imbalances.
He mentioned that the sudden price drop was predominantly due to a widespread sell-off following Renzo Protocol’s airdrop:
Sell-off likely caused by the end of the Season 1 Airdrop, users looking to acquire $ETH for other LRT/protocols.
Tommy also clarified that the depeg led to liquidations on leverage protocols like Gearbox and Morpho Labs, particularly affecting “loopers,” traders who use LRTs as collateral to borrow ETH for leverage.
As reported by Lookonchain, trader czsamsunsb.eth profited from the depeg by 121.65 ETH, equivalent to around $380,000 at the time of writing.

Renzo Protocol is an interface to the EigenLayer ecosystem and is the second-largest liquid restaking protocol, with over $3.2 billion in total value locked (TVL)—a nearly 100% increase from the previous month. It ranks second after, which has a TVL exceeding $3.8 billion.
While some traders may benefit from market fluctuations, the wider crypto community faces ongoing challenges related to investment stability and protocol dependability.
In other updates, recent evaluations hint that EigenLayer’s rapid expansion could potentially lead to a yield crisis.

Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron specializes in analyzing the variations between Western and Collective forms of capitalism post-World War II era.
With almost a decade of experience in the FinTech industry, Aaron comprehends the significant issues and challenges that crypto enthusiasts encounter. He is a dedicated analyst who prioritizes data-driven and fact-based content, catering to both Web3 natives and industry newcomers.
Aaron is a go-to resource for everything related to digital currencies, aiming to make blockchain & Web3 education more accessible to beginners and transform the space. He is quoted by various reputable outlets and is a published author. During his leisure time, he enjoys delving into market trends and searching for the next big opportunity.

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