0) Overview
Renzo is the second largest LRT with 1 million ETH staked, accounting for 33.5% of the market share (Etherfi accounts for 37.9%)
Renzo announced its token $REZ and airdrop plan on April 23, along with Binance Launchpool, which included 2.5% of the total $REZ supply.
1) Decoupling events
A few hours ago (around 0400 UTC), a sell-off of Renzo’s LRT - ezETH occurred on DEX, with the price of ezETH dropping to a low of around $700 before recovering.
The sell-off may be due to the end of the first quarter airdrop, and users want to get back ETH to mine on other LRT/protocols
This led to liquidations on leveraged protocols such as Gearbox Protocol and Morpho Labs. Loopers (users who repeatedly borrowed ETH using LRT as collateral to create leverage) suffered losses as a result.
2) Airdrop
Renzo allocated 10% of $REZ for airdrops, and the first quarter will be 5% of $REZ
The largest wallet will unlock 50% at the TGE, and the remaining 50% within 6 months (no further details yet)
Milady and SchizoPosters NFT holders will receive 2% of the 5% airdrop (0.1% of $REZ)
Some of the community's concerns include:
- Binance Launchpool ends on April 29th, trading starts on April 30th, and stakers can only claim the airdrop on May 2nd -> Binance stakers can sell two days in advance
- There were rumors that if users sold their ezETH, they would not be entitled to the airdrop. The team clarified in Discord that this was not true and stated that the airdrop was based entirely on the user’s points.
- NFT holders will receive airdrops even if they have not contributed anything, raising concerns about insider trading
- The airdrop ratio is too small
3) Token Allocation Pie Chart
In the $REZ announcement, Renzo included the following token distribution pie chart:
This is extremely misleading because the sizes of the sectors are completely inconsistent (two 2.5% sectors are the same size as a 13.44% or 20% sector; 30% and 31.56% are half a sector together, etc.), and readers may underestimate the amount of float controlled by the project/VC
Renzo deleted the tweet after posting it
Below is a recreated pie chart with the correct proportions. However, this is still a bit confusing because the airdrop portion is not shown.
It’s best to look at this in Binance’s version, which clearly shows the percentages and categories:
4) My opinion on this (subjective part)
- This is a mixture of legitimate criticism/panic/frustration
- Regarding decoupling, we need to recognize that this is a risk faced by all LRTs, and even if withdrawals are enabled, DEX pools may still decouple due to temporary imbalances
- There are definitely some areas that could be improved regarding airdrops, such as being more transparent about how they are determined. It should also be reconsidered whether it makes sense to airdrop to NFT holders who have no direct relationship with the protocol
- Regarding the pie chart, I tend to think it's just a mistake by the designer and the team lacks checking. I don't think this low-level trick will mislead crypto-native users. But in any case, it looks bad
