Renzo's EzETH Token Depeg Causes Panic In DeFi Community

The depeg was likely due to users wanting to exit ezETH after learning more about the REZ token's confusing distribution plan.

Renzo's liquid restaking token (LRT), ezETH, experienced a significant depegging event that liquidated millions from “loopers” using the token as collateral on leverage protocols like Gearbox. According to data from CoinMarketCap, the digital asset's value plunged to a low of $2,755 before recovering to its current level of $3,178 as of press time.

TL;DR Renzo's ezETH Token Value Drops: Renzo, the second-largest protocol for liquid restaking, experienced a significant drop in the value of its restaked ETH (ezETH) token. The price plummeted due to limited liquidity in the market, moving away from its usual 1:1 peg with WETH to a low of 0.27.

While the total supply of the REZ token is 10 billion, the initial circulating supply is pegged at 1.05 billion.

Despite the temporary price depeg, a trader made nearly $400,000 in profit due to the unfortunate incident.

ezETH of the Renzo protocol has experienced a strong dump, dropping to $700.