What's Driving Token Prices? May 1, 2024

REZ (-40%) - The second largest liquid restaking protocol, Renzo, launched its token yesterday but flopped right out of the gate. The project released its token supply schedule last week, with a 5% allocation to current users via an airdrop. However, over 60% of the supply was allocated to investors and team members. A pie chart of the token allocation on Renzo’s blog was misleading, with the 60% slice displayed as only half of the pie and the 5% and 2.5% slices displayed as much larger. Crypto Twitter was indignant, with many retweeting the offensive pie chart. To add insult to injury, Renzo also announced that those who purchased tokens through Binance Launchpad would receive them on April 30, but airdrop claimants could not claim theirs until May 2. Following the public outcry, Renzo quickly replaced its pie chart with a more accurate illustration and announced that the Binance Launchpad and airdrop claim would happen on the same day (April 30) and increased the airdrop allocation to 7%. The token has not fared well despite the tweaks and is down over -40% since the launch yesterday.
PENDLE (-31%) - DeFi protocol, Pendle, saw its token crash this week after a highly anticipated airdrop that, once again, disappointed the market’s expectations. On Monday, EigenLayer, the restaking protocol on Ethereum, announced an airdrop with allocations for current users. Users deposited assets into Pendle’s yield-trading protocol to maximize the potential airdrop they could earn from EigenLayer’s protocol. The airdrop announcement from EigenLayer was very disappointing since the airdropped tokens would not immediately be transferable and, therefore, not sellable once live. The project also barred U.S. users from claiming the airdrop, although the project itself did not geofence users from depositing assets. A set of confusing wording in the documents also made many users believe that “more complex DFfi protocols” (which includes Pendle) would be excluded from this airdrop round. In response, the PENDLE token subsequently dropped -17% in price.
BNB (-8%) - Last week, BNB Chain announced it would enable liquid staking on its platform in April or May. Yesterday, Binance’s Founder, CZ, was sentenced to four months in prison. CZ was arrested late last year by the U.S. Department of Justice. He pled guilty to the charges and paid a $50M fine alongside the $4.3B fine levied against the Binance exchange. He also has agreed to step down from the exchange’s day-to-day operations.

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