DeFi
Pendle hit with $3 billion drawdown as airdrop recovery fades – DL News
- Pendle’s TVL fell by 40% last week.
- The exodus was expected, as several Pendle markets expired on June 27.
- 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 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Since Wednesday, users have withdrawn nearly $3 billion, most of it in the form of so-called liquid re-staking tokens.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 the fact that some products have reached 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 blamed on cryptocurrencies’ favorite rewards program, which is behind many protocols’ boom and bust cycles: the drop.
Airdrops
Pendle Markets for Ether.Fi‘s eETH, Renzo’s ezETH, Puffer’s 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 listed these tokens on the new Pendle Markets. But this reward is not 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 the first 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 drops.
Derisk
“The next airdrop is slightly smaller, so you see some participants reducing risk,” Unsworth said.
“Also, the Renzo points program ends at the end of July – so I think a lot of people are probably just taking a moment to think about whether or not they want to lock up their tokens again.”
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 exits.
Rolling liquid re-staking tokens deposited into Pendle via Zircuit to new markets requires manual work, said Martinet Lee, Zircuit’s head of developer relations. DL News.
“[I’m] I was actually quite surprised by the amount of liquidity that initially noticed the expiration, and I also went through all the issues related to moving liquidity and supporting Zircuit,” he said.
Aleks Gilbert is DL News” DeFi correspondent based in New York. You can contact him at aleks@dlnews.com.