DeFi
Pendle hit by $3 billion withdrawal as re-staking airdrops fade – DL News
- Pendle’s TVL fell by 40% last week.
- The exodus was expected, as several Pendle markets expired on 27 June.
- But it also reflects a waning interest in reviving airdrops.
Pendle, a DeFi protocol that has climbed EigenLayer’s boom that amassed more than $6 billion in user deposits lost more than a third of that sum on Thursday as several of its markets 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Since Wednesday, users have withdrawn nearly $3 billion, most of it in the form of so-called liquid re-staking tokens.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 some products reaching maturity,” said Ian Unsworth, founder of Kairos Research. DL News.
“It turned out that this project aligned perfectly for the first five LRTs at the same time.”
But these outflows can also be attributed to cryptocurrencies’ favorite rewards program, which is behind the boom and bust cycles of many protocols: the airdrop.
Air drops
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 X job as “the big deadline of June 27”.
Investors could have included these tokens in the new Pendle markets. But that reward isn’t necessarily what it used to be.
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 tranche 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 access to EigenLayer for retail investors – 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 taking risks,” Unsworth said.
“The Renzo points program is also ending at the end of July, so I think a lot of people are probably taking a moment to think about whether or not they want to lock up their tokens again.”
Pendle’s exits have affected associated protocols, such as Zircuit. The value of cryptocurrencies deposited at Zircuit has dropped 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’m actually quite amazed by the amount of liquidity that first noticed the expiration, and also continued to go through all the issues of 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.