Renzo increases airdrop allocation slightly after community outrage

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

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Quick Take

Renzo Protocol has increased the token allocation for its initial airdrop from 5% to 7% in response to prior community dissatisfaction.
The tokens will be distributed in two phases: 7% in the first season at the end of the month and 5% in a subsequent phase.

Renzo Protocol 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 -3.41% ), a liquid restaking token issued by Renzo Protocol, 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.

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About Author

Vishal Chawla is The Block’s crypto ecosystems editor and has spent over seven years covering tech protocols, cybersecurity, artificial intelligence and cloud computing. Before joining The Block, Vishal held positions at IDG ComputerWorld, CIO, and Crypto Briefing. He can be reached on Twitter at @vishal4c and via email at [email protected]