ezETH

The liquid restaking token issued by Renzo Protocol when users deposit ETH or liquid staking tokens into the platform, representing a position that earns both Ethereum base staking rewards and additional yield from EigenLayer's Actively Validated Services. Unlike rebasing tokens like eETH, ezETH is an appreciating token: its exchange rate against ETH rises over time as rewards accumulate, while the wallet balance of ezETH itself stays constant. Renzo acts as a strategy manager that delegates restaked ETH to curated AVS operators across EigenLayer, abstracting the complexity of selecting AVS exposure from end users. ezETH is deployed across Ethereum mainnet, Arbitrum, and Base, with integrations into lending protocols like Morpho Blue and DEX liquidity pools. In April 2024, ezETH experienced a significant depeg event, briefly trading at a substantial discount to ETH on secondary markets, triggered by community concerns about REZ token airdrop allocation percentages, exposing the fragility of liquid restaking token price stability under social pressure. Example: The April 2024 ezETH depeg saw the token fall to roughly $688 against an ETH price near $3,200 on some DEXs, triggering cascading liquidations in DeFi protocols that had accepted ezETH as collateral. The event served as an industry lesson about liquidity fragility in liquid restaking tokens that have deep DeFi integrations but relatively shallow secondary market liquidity. Why it matters for Web3: ezETH's depeg event became a canonical case study in LRT risk, demonstrating that liquid restaking tokens face unique vulnerabilities at the intersection of smart contract risk, liquidity risk, and social sentiment around airdrop mechanics. It influenced subsequent protocol designs and risk frameworks for accepting LRTs as collateral.

Category: mining staking

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