Unleashing the Future of Finance: Pendle Finance’s Trailblazing Protocol Sets a New Standard
Pendle Finance is a decentralized finance platform that allows users to buy assets at a discount by splitting the yield from yield-bearing assets. This results in better prices than those on any exchanges. Pendle Finance also allows users to control their yield by choosing to long yield or hedge their yield exposure. Pendle AMM is designed for yield trading with concentrated liquidity, dual fee-structure, and negligible IL concerns.
What you'll learn 👉
How does it work?
Pendle Finance is a decentralized finance protocol that enables users to tokenize and sell future yields of yield-bearing assets. Here’s how it works:
- Yield tokenization: This feature allows yield-bearing asset owners to give up their right to yield for a specific time and yield tokens into a smart contract. Two tokens are then issued: Ownership Token (OT) and Future-Yield Token (XYT).
- Mint function: Users select an underlying asset and desired expiry date to mint OT and XYT. While the OT represents ownership of the underlying asset for a specific time, the XYT represents the future yield for the same time.
- Swap function: This feature allows users to swap XYT and baseTokens. By swapping XYT for baseToken, the user locks in the current yield and receives cash upfront, while by swapping baseToken for XYT, the user gains exposure to future yields without having to lock in a capital-heavy asset.
- AMM: XYT can be deposited into Pendle’s AMM to provide liquidity. In turn, liquidity providers receive fees and other incentives.
- Redeeming: The underlying aToken can be redeemed from Pendle only by wallets that hold the OT and the corresponding XYT token. XYTs have an expiry date, and once they expire, they no longer have any value.
Pendle aims to solve the problems related to yield volatility and enable users to better manage yield based on individual risk appetite. It currently supports Aave and Compound, with plans to integrate more platforms in the future.
Pendle’s Remarkable Growth Defies the Trend
While many protocols have experienced a decline in Total Value Locked (TVL) over the past month, Pendle is defying this trend by surging in the opposite direction. Its TVL growth has been extraordinary, reaching an all-time high on May 7th at a staggering $65.89 million.
On-chain data further supports Pendle’s success, revealing a significant surge in holders over the past couple of months starting in February 2023. Moreover, Pendle’s expansion on Arbitrum has been a resounding success, attracting nearly three-quarters of holders on Ethereum and witnessing substantial TVL growth, which currently stands at $26.49 million as of May 14th.
Price Surge and New Pool Launch Fuel Momentum
The price of Pendle’s native token has also been on an upward trajectory. The recent surge during the past weekend was fueled by the launch of a new pool, causing individuals to realize what they were missing out on. This price momentum has brought significant attention to the project and further contributed to its overall growth.
Magic Strategies to Maximize Gains
Now, let’s delve into the magic strategies that can enhance your earnings within the Pendle ecosystem.
1️⃣ Buy Discounted Assets: If you strongly believe in the future of Ethereum ($ETH), Pendle allows you to acquire assets at a discounted price. Through Pendle, you can trade assets and their yield separately, enabling you to grab the asset while enjoying the yield discount.
2️⃣ Liquidity Provision for Pros: As a professional user, you can take your involvement a step further. By adding liquidity to one of Pendle’s pools, you can provide liquidity for individuals swapping PT (asset without yield) with SY (wrapped asset), earning a juicy Annual Percentage Yield (APY).
3️⃣ The Power of Pendle ($PENDLE): You may be wondering about the role of Pendle’s native token, $PENDLE, within the ecosystem. It plays a vital role in enhancing your overall experience. Holding $PENDLE can increase your APY, entitle you to a share of the protocol’s revenue, and grant you voting rights for the pools that interest you the most.
Price action
Pendle (PENDLE) has experienced a price increase, currently trading at $0.474896 with a 1.89% rise in the last 24 hours and a 38.55% increase over the past week. The token’s market capitalization stands at $46,041,479, with a circulating supply of 97 million PENDLE tokens.
PENDLE can be traded on exchanges such as Camelot, Bitget, and Sushiswap, with the PENDLE/WETH trading pair being the most active on Camelot.
The daily trading volume is $1,506,280, indicating a recent decrease in market activity. The all-time high for PENDLE was $2.45, while the all-time low was $0.03377729. The fully diluted valuation of Pendle is $110,045,360, representing the maximum market cap based on a hypothetical circulating supply of 230 million tokens.
Conclusion
In conclusion, Pendle Finance provides an exceptional opportunity for those seeking to accumulate generational wealth in the upcoming bull cycle. Its remarkable growth, innovative strategies, and the value proposition of its native token make Pendle an enticing investment prospect. So go ahead, explore the possibilities with Pendle, and join the chorus of “PENDLEEE” resonating throughout the crypto community. The degens must degen, after all.
Disclaimer: This is not financial advice. Please conduct your own research before making any investment decisions.
