Renzo’s Ethereum-pegged asset ezETH Depegged Significantly: What Happened?
Renzo’s Ethereum-pegged asset ezETH experienced a significant depeg within the past 24 hours, causing a sharp drop in its value. According to data from The Block, ezETH plummeted 18.3% to about $2,642 in a matter of minutes, with some data trackers showing the token falling to around $700. Although ezETH has partially recovered, it still saw a 5.6% drop within the past day, trading at $3,077 at 12:40 p.m. ET.
ezETH is a liquid restaking token (LRT) from the Renzo protocol, where users earn ezETH by restaking ether or other liquid staking tokens. The token is designed to maintain equal value with ether, but recent events have caused a disruption in its peg.
The depegging of ezETH was attributed to Binance Labs’ announcement of the token distribution plan for REZ, Renzo’s governance token. This news led to a sell-off as Binance stakers using Launchpool had the opportunity to sell their tokens before ezETH holders, causing buyers to exit ezETH in order to farm other liquid restaking tokens.
Furthermore, discrepancies in the token distribution allotments and concerns about insider trading related to NFT holders of unrelated collections added to the confusion and contributed to the sell-off.
As the crypto community continues to monitor the situation, it is evident that the volatility in the market can have a significant impact on pegged assets like ezETH. Investors and users are advised to stay informed and cautious in their trading decisions.
Disclaimer: The Block is an independent media outlet providing news, research, and data. This article is for informational purposes only and should not be considered as financial advice.
