- Pendle's TVL fell 40% in the last week.
- The exodus was expected, as several Pendle markets expired June 27.
- But it also reflects waning interest in restaking airdrops.
Pendle, a DeFi protocol that rode the EigenLayer boom to amass more than $6 billion in user deposits, lost more than one-third of that haul Thursday as several of its markets expired.
Since Wednesday, users have withdrawn almost $3 billion, most of that in so-called liquid restaking tokens. The total value of user deposits was just above $3.7 billion Monday.
That outflow “at least was due to some products reaching their maturity,” Ian Unsworth, founder of Kairos Research, told DL News.
“It just so happened that this perfectly lined up for the top five LRTs all at the same time.”
But those outflows can also be pinned on crypto’s favourite rewards program, which drives many protocols’ boom-and-bust cycles: the airdrop.
Airdrops
Pendle markets for Ether.Fi’s eETH, Renzo’s ezETH, Puffer pufETH, Kelp’s rsETH, and Swell’s rswETH ended Thursday in what Pendle itself referred to in an X post as “the big June 27 maturity.”
Investors could have rolled those tokens into new Pendle markets. But that payoff isn’t necessarily what it used to be.
That’s because many had ploughed money into DeFi protocol EigenLayer and several affiliated projects, like Pendle. Their goal: to position themselves for expected airdrops, the distribution of free tokens to early and loyal users.
Some of those airdrops have come and gone.
Early EigenLayer users began claiming a slice of the protocol’s 1.6 billion EIGEN tokens in May.
And liquid restaking protocols Renzo and Ether.Fi — which simplify retail investors’ access to EigenLayer, among other things — airdropped their own tokens in April and March, respectively.
All three will distribute their tokens in successive “seasons,” and users might still have an opportunity to claim a slice of those future airdrops.
Derisking
“The next airdrop is slightly smaller, so you’re seeing some participants derisking,” Unsworth said.
“Also the Renzo points program ends in late July — so I think a lot of people are probably just taking a moment to consider whether or not they want to lock up their tokens again.”
The outflows from Pendle have affected related protocols, like Zircuit. The value of crypto deposited in Zircuit has fallen 15% over the past week.
Rolling liquid restaking tokens deposited in Pendle via Zircuit into new markets requires manual work, Martinet Lee, Zircuit’s head of developer relations, told DL News.
“[I’m] actually quite amazed by the amount of liquidity that first noticed the expiry, and also still went over all the problems of moving the liquidity and supporting Zircuit,” he said.
Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can contact him at aleks@dlnews.com.
