{"investigation":{"slug":"renzo","entity_name":"Renzo","trust_score":22,"severity_base":null,"score_modifier":0,"confidence":0.82,"status":"published","content_type":"investigation","summary":"Renzo Protocol is an Ethereum liquid restaking protocol that issues ezETH, serving as an interface to the EigenLayer ecosystem. In April 2024, ezETH suffered a severe depeg event — dropping as low as $700 in under one hour — triggered by an unpopular REZ tokenomics announcement that concentrated approximately 65% of supply with insiders and investors. The event caused over $56 million in DeFi liquidations affecting more than 250 users, and the REZ token has since lost approximately 97% of its all-time high value.","sections":[{"content":"On April 24, 2024, Renzo Protocol's liquid restaking token ezETH suffered an acute depeg on Uniswap, dropping from approximately $3,100 (near ETH parity) to a low of $700 — a decline of approximately 79% — in under one hour before partially recovering. The event was triggered by a mass sell-off following the April 23 announcement of REZ tokenomics, which disappointed the community by allocating only 5% of the total REZ supply to the initial airdrop. Leveraged users who had looped ezETH positions on Morpho and Gearbox — borrowing ETH against ezETH, restaking it, and acquiring more ezETH — faced automatic liquidation when the price fell below their collateral thresholds. Gearbox reported 115 users liquidated with losses of approximately $33 million; Morpho reported 146 users liquidated with losses of approximately $23 million. Total user losses exceeded $56 million. At the time of the depeg, the official Renzo team did not issue a public statement addressing user frustrations or the price collapse.","heading":"ezETH Depeg Event (April 2024)","sources":[],"severity":"medium"},{"content":"The REZ tokenomics announcement that preceded the depeg revealed that approximately 65% of the total REZ supply was allocated to insiders — comprising Core Contributors (20%), a Fundraising/investor category (31.56%), and a Foundation reserve (12.44%). The initial community airdrop received just 5% of supply, later revised to 7% following backlash. The tokenomics announcement also included a pie chart with blatantly incorrect proportions, which community members alleged was an attempt to misrepresent the true distribution. Renzo subsequently raised the community allocation from 30% to 32% and increased the initial airdrop from 5% to 7% of total supply. Investor tokens are subject to a one-year cliff followed by 10% unlock and one-year linear monthly vesting. Core contributor tokens carry the same one-year cliff with a two-year linear monthly vesting schedule. Renzo raised a $3.2 million seed round in January 2024 led by Maven11 Capital, followed by a $17 million Series A in June 2024 led by Galaxy Ventures and Brevan Howard Digital, for a total of approximately $20.2 million raised from 23 investors.","heading":"REZ Token Allocation and Insider Concentration","sources":[],"severity":"medium"},{"content":"The REZ Token Generation Event (TGE) was listed on Binance Launchpool beginning April 30, 2024. A structural asymmetry in the launch was widely criticized: Binance launchpool farmers received their REZ tokens two days before airdrop recipients could claim, enabling early Binance participants to sell into the market before the broader community could access their allocations. The REZ token debuted at a market capitalization of approximately $289 million. In response to community pressure, Renzo postponed the airdrop claim date to April 30, introduced vesting for large holders (addresses with 500,000+ points received only 50% at launch with the remainder unlocking linearly over three months), and set a minimum participation threshold of 360 points. Despite these adjustments, REZ has declined approximately 97% from its all-time high of $0.2782, trading near $0.007 as of mid-2025.","heading":"REZ Token Launch Controversy","sources":[],"severity":"medium"},{"content":"A Code4rena competitive audit conducted April 30 to May 8, 2024 identified 22 unique vulnerabilities, of which 8 were rated HIGH severity and 14 rated MEDIUM severity. Critical issues included the potential for withdrawals to be locked permanently if the recipient is a contract, incorrect calculation of queued withdrawals, and a gas inefficiency in the calculateTVL function that could render the protocol unusable even with a modest number of operators and supported tokens, up to exceeding the block gas limit. Renzo has conducted additional audits through Halborn, Sigma Prime, and Code4rena, and operates a bug bounty program on Immunefi. The mitigations for all identified High and Medium issues were reviewed in a subsequent June 2024 mitigation review. As a wrapper on EigenLayer, Renzo also inherits systemic risks from the underlying restaking protocol, including AVS slashing conditions and EigenLayer-level smart contract risk.","heading":"Smart Contract Risks and Audit Findings","sources":[],"severity":"medium"},{"content":"On July 22, 2024, Renzo Protocol's official Discord server was compromised by malicious actors who posted phishing links claiming to offer retroactive loyalty rewards for REZ and ozETH holders. Renzo issued an on-chain alert via its X account warning users to treat all messages from server admins as potentially dangerous and to refrain from clicking any links. ZachXBT flagged the phishing link to the community via Telegram. The extent of user financial losses from this incident was not confirmed at the time of reporting.","heading":"Discord Security Breach (July 2024)","sources":[],"severity":"medium"},{"content":"The ezETH depeg highlighted systemic risks from integrating liquid restaking tokens into leveraged DeFi protocols. Partnerships with Morpho and Gearbox encouraged users to take on recursive leverage — depositing ezETH, borrowing ETH, restaking to acquire more ezETH — amplifying both yield and liquidation risk. Aave governance delegate Marc Zeller publicly criticized Morpho and its risk advisor Gauntlet for insufficient user protections during the event. Morpho argued its architecture prioritizes user autonomy over governance-managed risk parameters. The incident underscored that liquidity depth for liquid restaking tokens on decentralized exchanges may be insufficient to handle large sell events without severe price impact, particularly for tokens with concentrated holder bases.","heading":"Broader Restaking and DeFi Integration Risks","sources":[],"severity":"medium"}],"timeline":[{"date":"2024-01-15","event":"Renzo raises $3.2 million seed round led by Maven11 Capital with token warrants; begins rewarding users with points for minting ezETH","source":"","source_url":"https://www.coincarp.com/fundraising/renzo-seed/"},{"date":"2024-04-23","event":"Renzo announces REZ tokenomics on Binance, revealing only 5% allocated to initial airdrop and 65% to insiders/investors; community reacts with outrage over a misleading pie chart","source":"","source_url":"https://www.theblock.co/post/290709/renzos-ezeth-depegs-18-3-following-rez-tokenomics-announcement-on-binance"},{"date":"2024-04-24","event":"ezETH depegs to $700 on Uniswap (a ~79% decline in under one hour), triggering over $56 million in liquidations across Morpho (146 users, ~$23M) and Gearbox (115 users, ~$33M)","source":"","source_url":"https://protos.com/depeg-of-3b-restaking-token-ezeth-causes-over-60m-in-defi-liquidations/"},{"date":"2024-04-24","event":"Renzo team makes no public statement addressing ezETH depeg or user losses at time of event","source":"","source_url":"https://www.dlnews.com/articles/defi/renzos-ezeth-loses-ether-peg-drops-79-in-under-one-hour/"},{"date":"2024-04-28","event":"Renzo revises airdrop terms following community backlash: initial airdrop raised from 5% to 7%, community allocation from 30% to 32%, vesting added for large holders","source":"","source_url":"https://crypto.news/renzo-team-changes-airdrop-conditions-amid-community-criticism/"},{"date":"2024-04-30","event":"REZ token launches on Binance Launchpool and begins trading; debuts at approximately $289 million market cap","source":"","source_url":"https://www.coindesk.com/markets/2024/04/30/liquid-restaking-protocol-renzo-airdrops-rez-token-debuts-at-289m-market-cap"},{"date":"2024-05-08","event":"Code4rena audit concludes, reporting 8 high-severity and 14 medium-severity vulnerabilities in Renzo smart contracts","source":"","source_url":"https://code4rena.com/reports/2024-04-renzo"},{"date":"2024-06-18","event":"Renzo raises $17 million Series A led by Galaxy Ventures and Brevan Howard Digital Nova Fund","source":"","source_url":"https://www.theblock.co/post/300647/ethereum-restaking-protocol-renzo-raises-17-million"},{"date":"2024-07-22","event":"Renzo official Discord server compromised; phishing links posted claiming retroactive loyalty rewards; ZachXBT alerts community via Telegram","source":"","source_url":"https://www.cryptotimes.io/2024/07/22/renzo-discord-hacked-by-scammers-promoting-fake-tokens/"},{"date":"2025","event":"REZ token declines approximately 81.55% across 2024, continuing to approximately -84% in 2025; token trades roughly 97% below its all-time high","source":"","source_url":"https://coincodex.com/crypto/renzo-protocol/","date_original":"2025-01-01"}],"sources_used":[],"source_tags":["zachxbt"],"addresses":[{"chain":"solana","label":"Renzo Restaked SOL (ezSOL)","address":"ezSoL6fY1PVdJcJsUpe5CM3xkfmy3zoVCABybm5WtiC"}],"reviewed":false,"reviewed_by":null,"model_used":"claude-sonnet","created_at":"2026-05-04T16:04:59.089635+00:00","updated_at":"2026-08-29T01:35:56.683+00:00"}}