Renzo increases airdrop allocation slightly after community outrage and temporary ezETH depeg

Liquid restaking platform Renzo has now adjusted its airdrop details, raising the allocation in the first season from 5% of its tokens to 7%. This change came in response to dissatisfaction from its users about the tokenomics details.

7% of the tokens will be distributed in the first phase — going live at the end of the month — and 5% in the subsequent phase. A total of 12% of the 10 billion supply is allocated to the user airdrops, Renzo noted.

The claim date for the first airdrop has been rescheduled to April 30 — strategically set an hour before the protocol’s listing on the Binance exchange — a shift from the previously outlined schedule.

Under the new criteria, participants with at least 360 Renzo points are eligible for the airdrop, which they can claim at the token generation event proportionally based on their points tally.

Earlier, the top 5% of eligible wallets had half of their airdrop vested over the next six months. In the new update, 99% of all eligible wallets will be fully unlocked at launch.

The changes came after Renzo-restaked ether ( ezETH +0.46% ), a liquid restaking token issued by Renzo, depegged from the price of ether amid an unexpected drop and lost up to 18% of its parity with ETH. Although the token has recovered considerably since yesterday, it still trades at a 2% discount.

The protocol’s initial tokenomics, presented through a pie chart, led to apparent frustration within its community of users.

The team also disqualified airdrop farmers who had participated in ‘looping’ — a leverage strategy where ezETH is sold for ETH and then redeposited into the protocol to accrue more rewards. This led to users exiting by selling large quantities of ezETH. 

The large sell-off of ezETH was exacerbated by the thin on-chain liquidity, resulting in a sharp decline in token value. The cascade of liquidations triggered by this sell-off led to more than $50 million in losses for individuals with leveraged ezETH positions.

The token price now appears to be closing in on its parity with ETH, trading at $3,053, according to The Block's price page.

Renzo raised $3.2 million in a seed funding round in January. There are more than 1 million ether ($3 billion) locked in the protocol, according to The Block's data dashboard, making the second-largest liquid restaking platform.