DeFi
Pendle hit by $3 billion withdrawal as re-staking airdrops fade – 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 resuming airdrops.
Pendle, a DeFi protocol that mounted 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Since Wednesday, users have withdrawn nearly $3 billion, most of it in the form of liquid recovery tokens. The total value of user deposits as of Monday was just over $3.7 billion.
Pendle has lost nearly $3 billion in crypto since several markets expired last week.
The leak “was at least because some products were maturing,” 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’ preferred rewards program, which is behind the boom and bust cycles of many protocols: the airdrop.
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 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 tranche of the protocol’s 1.6 billion EIGEN tokens in May.
And Renzo liquid restoration protocols and Ether.Fi — which among other things simplify 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 reducing risk,” Unsworth said.
“Plus, 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 cryptocurrencies deposited with Zircuit has fallen by 15% over the past week.
Zircuit was impacted by Pendle’s cash outflows.
Moving cashback tokens deposited in Pendle via Zircuit to new markets requires manual work, said Martinet Lee, Zircuit’s developer relations manager. 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.