DeFi
Pendle hit with $3 billion levy as airdrop recovery fades – DL News
- Pendle’s TVL fell 40% last week.
- The exodus was expected as several Pendle contracts expired on June 27.
- But it also reflects a waning interest in reviving airdrops.
Pendle, a DeFi protocol that mounted EigenLayer’s boom to amass more than $6 billion in user deposits, lost more than a third of that amount Thursday as several of its deals expired.
Since Wednesday, users have withdrawn nearly $3 billion, most of it in the form of so-called liquid re-staking tokens. The total value of user deposits was just over $3.7 billion as of Monday.
Pendle has lost nearly $3 billion in crypto since several markets expired last week.
This leak “was at least due to the fact that some products were reaching maturity,” said Ian Unsworth, founder of Kairos Research. DL News.
“It just happened to line up perfectly for the first five LRTs at the same time.”
But these outflows can also be blamed on cryptocurrencies’ favorite rewards program, which is behind many protocols’ boom and bust cycles: the airdrop.
Airdrops
Pendle Markets for Ether.FiRenzo’s eETH, Renzo’s ezETH, Puffer pufETH, Kelp’s rsETH and Swell’s rswETH ended Thursday in what Pendle himself mentioned in an job as “the big deadline of June 27.”
Investors could have invested these tokens in new Pendle markets. But the benefits are no longer necessarily the same as before.
This is because many have invested money in the DeFi protocol EigenLayer and several affiliated projects, like Pendle. Their objective: to position themselves for the expected airdrops, the distribution of free tokens to early and loyal users.
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Some of these airdrops have come and gone.
The first users of EigenLayer have started affirming a slice of the protocol’s 1.6 billion EIGEN tokens in May.
And the liquid re-staking protocols Renzo and Ether.Fi – which, among other things, simplifies retail investors’ access to EigenLayer – airdropped their own tokens in April and March, respectively.
All three will distribute their tokens in successive “seasons,” and users may still have the opportunity to claim a share of these future airdrops.
Derisk
“The next airdrop is slightly smaller, so you see some participants reducing risk,” Unsworth said.
“The Renzo points program also ends at the end of July. So I think many people are probably taking a moment to think about whether or not they want to re-lock their tokens. »
Pendle’s releases affected associated protocols, such as Zircuit. The value of crypto deposited in Zircuit has fallen by 15% over the past week.
Zircuit was impacted by Pendle’s cash outflows.
Rolling liquid re-staking tokens deposited into Pendle via Zircuit to new markets requires manual work, said Zircuit developer relations manager Martinet Lee. DL News.
“[I’m] I was actually quite amazed by the amount of liquidity that first noticed the expiration, and I also went over all the issues related to moving liquidity and supporting Zircuit,” he said. -he declares.
Aleks Gilbert is DL News‘ DeFi correspondent based in New York. You can contact him at aleks@dlnews.com.