Author: @Web3Mario
Abstract: In the previous article, we elaborated on the embodiment rate risk of the AAVE Pendle PT leverage yield strategy, and received many positive feedbacks from friends. Since we have been studying market opportunities in the Pendle ecosystem recently, this week we hope to continue sharing an observation about the Pendle ecosystem, namely the real yield and risks of the YT leverage point strategy. Overall, taking Ethena as an example, the potential return rate of the Pendle YT leverage point strategy can reach 393%, but investment risks still need to be noted.
Utilizing the leverage attributes of YT assets to speculate on the potential yield of Points
First, let's briefly introduce this yield strategy. In fact, at the beginning of 2024, as LRT projects represented by Eigenlayer began choosing point mechanisms to determine subsequent Airdrop rewards, this strategy gained market attention. Users can increase fund leverage by purchasing Pendle YT to obtain more points, thereby gaining a larger share of rewards during reward distribution.
The reason for purchasing YT assets to increase fund leverage lies in Pendle's mechanism. We know that Pendle converts interest-bearing token certificates into Principal Token (PT) and Yield Token (YT) through synthetic assets. One interest-bearing token can be converted into one PT and one YT, where PT is a zero-coupon bond that can be exchanged 1:1 for native assets at maturity. Its fixed interest rate is determined by the discount ratio of PT relative to native assets in the secondary market created by Pendle AMM, and the remaining duration. YT represents the accumulated earning capacity of a locked interest-bearing asset during its duration. Holding a YT is equivalent to owning the future income rights of a native asset for a certain period.
[The rest of the translation follows the same professional and precise approach, maintaining the technical terminology and context.]2. On some third-party Point OTC exchanges, such as whales market, cash out part of the Airdrop value of Point when the allowed price is higher.
3. For the rate dividend real yield of sUSDe, it can only be partially hedged by shorting major asset classes like BTC, ETH, etc., because we know that sUSDe's funding rate is usually higher during bull markets, as bullish investors are willing to pay higher funding rates. With the reversal of market sentiment, currently, one can only hedge the risk of rate decline by shorting major asset classes. However, Pendle's Boros product allows users to hedge rate risks, which is also worth noting.
Conclusion
This article primarily uses sUSDe as an example to introduce how to measure the yield and risks of YT leverage point strategies. For other targets, readers can research using this methodology and are welcome to discuss with the author.
