Renzo launched in 2024 as a liquid restaking protocol competing with ether.fi for EigenLayer deposits. Users deposited ETH and received ezETH, a liquid restaking token that could be used across DeFi while earning EigenLayer points. Renzo differentiated by positioning itself as a “strategy manager” — actively selecting which AVS operators to delegate to, optimizing for yield and risk on behalf of depositors.
Renzo grew fast, reaching over $3 billion in TVL before its token launch. The REZ token airdrop in April 2024 was one of the most discussed DeFi events of the year, though it also generated controversy. Some early depositors felt the allocation was too small relative to the capital and gas they had committed. The “points to tokens” conversion rate disappointed farmers who had expected larger rewards.
The ezETH token briefly depegged from ETH during the airdrop period, dropping to $0.95 as farmers rushed to withdraw and sell their REZ tokens. The depeg was temporary but illustrated the fragility of liquid restaking tokens — when many holders are there for the airdrop rather than the product, the selling pressure at token launch can be intense enough to break the peg.
Renzo’s experience highlighted a broader tension in DeFi: the same points programs that attract deposits also attract mercenary capital that leaves the moment rewards are distributed. Building sustainable TVL requires either real yield that justifies staying or some form of lock-up that prevents immediate exits. Most liquid restaking protocols haven’t solved this problem, and Renzo’s post-airdrop TVL decline illustrated why it matters.
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