What is Pendle? Overview of the LSDfi project actively promoted by Binance

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VIC Crypto
08-24
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Pendle Finance is a decentralized protocol that enables future tokenization and trading of profits. As a profit Derivative protocol, they are bringing the interest rate Derivative market, TradFi, into DeFi, making it accessible to all. Pendle Finance helps to harness the full profit potential, allowing users to implement advanced yield strategies such as fixed yield and long-term yield.
Article table of contents
  1. What is Pendle?
  2. Key Highlights of Pendle
  3. How does Pendle work?
  4. Route
    1. Current route
    2. Commercial and business development progress:
  5. Team
  6. Investments and partners
  7. Tokenomics
    1. Details PENDLE
    2. Token Allocation
    3. Allocation plan
    4. Token Utility
  8. Similar projects
  9. Project information channel

What is Pendle?

Pendle is an unlicensed yield trading protocol that allows anyone to make directional bets on the volatility of yields in the market. The yielding asset is divided into Principal Token (PT) and Yield Token (YT) giving users the option of earning either fixed or flexible yield on Pendle's v2 AMM.

PT represents the principal Capital of a yield-bearing asset and can be redeemed upon maturity. PT can be traded at any time, even before maturity. PT is always traded at a price lower than the original value because the yield factor is subtracted. It can be thought of as a "call bond" in traditional financial markets and a "fixed yield" represented by a guaranteed appreciation to its full value at maturity.

The YT represents the yield generated by the principal yielding asset and the cumulative yield can be claimed at any time from the Pendle console. YT can be traded at any time, even before maturity. Buying YT can be considered as “interest payment” in the traditional financial market and allows users to predict and make a profit when the return received is higher than the cost of purchasing YT.

Yield is a core component of DeFi, with LSD-Fi being the fastest growing market segment after ETH staking goes live. Pendle aspires to be the premier DeFi venue for profit management, and it also aims to enhance the liquidation of protocols with profitable assets.

Key Highlights of Pendle

  • Early pioneer in profitable trading: Launched V1 Primary Network in June 2021 with over 350 million USD in volume .
  • V2 Enhancement: Launching v2 Primary Network in Q4/2022 with newly upgraded AMM v2 model delivering up to 200x higher Capital efficiency than v1. As of June 2023, Pendle v2 has surpassed $100 million in TVL and $100 million in total volume.
  • Capital Efficient AMM: Pendle's AMM design enables both PT and YT swaps through a single liquidation pool by implementing a dummy AMM with flash swaps. Users can enjoy lower slippage fees with deeper liquidation while LP earn fees from both PT and YT swaps, which doubles their profits.
  • Minimal Impermanent Loss (IL): The Pendle v2 design ensures that the IL is negligible because Pendle's AMM takes into account the natural appreciation of the PT by shifting the AMM curve to push the PT price back to the base value. its as time goes on.



How does Pendle work?

The protocol allows users to control their productivity. The Pendle protocol is currently built on Ethereum, where users can implement various profit management strategies.

First, Pendle wraps the yield Token into SY (standardized yield token). The SY is then divided into their main components and returns, PT and YT, allowing them to trade through a custom v2 AMM.

PT is equivalent to a zero-interest bond, while YT is equivalent to an interest payment.

By creating a profit market in DeFi, this protocol exploits the full profit potential. Pendle allows users to implement advanced profit strategies, such as: long-term asset price reductions; fixed return for low risk, stable growth; long yield; or a combination of the above strategies.

Route

Current route

Quarter 3/2023:

Deployment on BNB Chain brings profitable trading to BNB Chain ecosystem

Pendle Earn: New simplified user interface that provides a decentralized fixed-rate product using PT tokens.

Quarter 4/2023:

Permissionless listing on Pendle allows any protocol to establish a profit market

Commercial and business development progress:

  • LSD-Fi Sector: Pendle Protocol has integrated with major blue-chip LSD protocols such as Lido's stETH, Rocket's rETH, Ankr's ankrETH, and Frax's sfrxETH, creating deep liquidation for LSD assets.
  • vePENDLE War: Penpie XYZ, Equilibria and StakeDAO have launched a liquidation ve- Stake Derivative on Pendle.
  • Perps/Derivatives: Pendle allows users to trade on both GMX's GLP yield and Gains Network's gDAI yield, providing the option of hedging or long-term profit from traders' fees.
  • DEX Liquidation : Pendle has created a profit market for LP on Stargate USDT pool, a new Pool三 on PENDLE/ETH LP by Camelot as well as LP Aura Finance & Balancer to further increase yield with same liquidation.

Team

TN Lee: Former CEO is the head of BD of Kyber Network

Vu Nguyen: CTO, formerly leading smart contract developer at Digix and 3x Math Olumpic gold medalist.

Investments and partners

PENDLE raised $3.7 million in a seed round in April 2021, representing 14.9% of the total supply with FDV at $35 million.

Tokenomics

Details PENDLE

  • Ticker : PENDLE
  • Token Type: ERC-20, BEP20
  • Total Token Supply: 251,061,124 PENDLE
  • Current circulating supply: 140,183,903 PENDLE (~56.00% total supply)
  • Binance Launchpool: 5,021,222 PENDLE (~2.00% of total supply)
  • Total Supply: 251 million PENDLE

Token Allocation

  • Binance Launchpool: 2.00%
  • Investors: 15.00%
  • Public Sales : 7.00%
  • Team: 22.00%
  • Foundation/ Treasury: 16.00%
  • Advisors: 1.00%
  • Liquidity Incentives: 37.00%

Allocation plan

  • All Token Lockup are unlocked since April 2023
  • Pendle will switch to a permanent emissions model. Currently weekly emissions are around 460,000.
  • Weekly emissions will gradually decrease by 1.10% weekly until April 2026. At this time, the current token economy system allows a final inflation rate of 2.00% per year as an incentive.

Token Utility

  • Launch Liquidation : PENDLE rewards are used as an incentive to launch liquidation for protocols
  • Incentive channel: Lock PENDLE as vePENDLE for up to 2 years to vote on the direction of emissions rewards for different groups
  • Fee accumulation: Locked vePENDLE holders accumulate fees from two revenue streams
    • Swap fees are generated by all Swap on Pendle AMM
    • Profit token fee (YT). Pendle collects a 3% fee from all profits accrued through YT, 100% of which is redistributed to vePENDLE holders.

Similar projects

The projects with the highest TVL share in the LSDfi sector include: Lybra, Instadapp, Raft and unshETH

Project information channel

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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