Introduction
In the rapidly evolving decentralized finance (DeFi) world, new projects constantly emerge, each aiming to revolutionize the space in unique ways. Among a multitude of projects, Pendle stands out as a trailblazer, offering a fresh perspective on yield optimization through tokenization. With its innovative approach, Pendle provides DeFi enthusiasts with unprecedented opportunities. Bitrue users can now trade $PENDLE on the platform, expanding the possibilities for investors in the DeFi space.
What is Pendle?
Pendle is a pioneering protocol that enables the trading of tokenized future yield on an Automated Market Maker (AMM) system. Unlike traditional DeFi platforms, Pendle eliminates the need for collateral, offering yield asset holders additional yield opportunities and traders direct exposure to future yield streams. This opens up new possibilities for investors in the DeFi space, creating a more inclusive and dynamic ecosystem.
What Does Pendle Do?
Pendle gives users the reins to their yield. Pendle is a permissionless yield-trading protocol where users can execute various yield-management strategies.
There are 3 main parts to fully understand Pendle:
- Yield Tokenization
First, Pendle wrap yield-bearing tokens into SY(standardized yield tokens), which is a wrapped version of the underlying yield-bearing token that is compatible with the Pendle AMM (e.g. stETH → SY-stETH). SY is then split into its principal and yield components, PT (principal token) and YT (yield token) respectively, this process is termed as yield-tokenization, where the yield is tokenized into a separate token.
2. Pendle AMM
Both PT and YT can be traded via Pendle’s AMM. Even though this is the core engine of Pendle, understanding of the AMM is not required to trade PT and YT.
3. vePENDLE
As a yield derivative protocol, we are bringing the TradFi interest derivative market (worth over $400T in notional value) into DeFi, making it accessible to all.
By creating a yield market in DeFi, Pendle unlocks the full potential of yield, enabling users to execute advanced yield strategies, such as:
- Fixed yield (e.g. earn fixed yield on stETH)
- Long yield (e.g. bet on stETH yield going up by purchasing more yield)
- Earn more yield without additional risks (e.g. provide liquidity with your stETH)
- A mix of any of the above strategies, learn more on how to execute these strategies at our Yield-Trading Handbook
What are the Benefits of Pendle?
- Accessibility
Pendle aims to support numerous protocols and assets, providing users a single platform for managing their yield. This holistic approach simplifies yield management and reduces the need for multiple interfaces. By aggregating various yield opportunities in one place, Pendle enhances accessibility and convenience for DeFi enthusiasts.
- Flexibility
With Pendle, users have full control over their capital. They can deposit or withdraw funds anytime, without waiting for contract maturation. This flexibility enhances liquidity and enables users to adapt their strategies according to market conditions. By offering this level of flexibility, Pendle empowers users to maximize their potential returns while actively managing their risk exposure.
- Fully On-Chain
Pendle’s transactions are handled by smart contracts, ensuring transparency and verifiability. This on-chain approach builds trust between Pendle and its users, eliminating the need for centralized intermediaries. By operating entirely on the blockchain, Pendle enhances security, reduces counterparty risk, and establishes a decentralized and trustless environment for DeFi participants.
$PENDLE Token
$PENDLE is the native ERC-20 utility token of the Pendle ecosystem. Initially, it functions solely as a utility token, and its governance features will be introduced as the protocol matures. As the project evolves, the community will have an opportunity to actively participate in shaping the future of Pendle through decentralized governance.
Token Emission Schedule and Allocation
Pendle follows a hybrid inflation model for token emission. In the first 26 weeks, 1.2 million PENDLE tokens will be emitted weekly. Afterward, liquidity incentives will decrease by 1% weekly until week 260. At that stage, a terminal inflation rate of 2% per year, based on the circulating supply, will be implemented. Pendle prioritizes liquidity incentives to foster deep and liquid yield markets. Initially, the team determines incentive distribution, which transitions to community governance. The token distribution aims to provide equal opportunities for participation and ownership. The perpetual inflation model ensures continuous contributions to maintain an ownership position.
Conclusion
Pendle’s innovative approach to yield optimization through tokenization presents exciting opportunities for DeFi enthusiasts. By eliminating the need for collateral and allowing the trading of tokenized future yield, Pendle empowers users with greater flexibility, accessibility, and control over their investments. The fully on-chain nature of the protocol ensures transparency and trust, while the $PENDLE token serves as a key utility within the ecosystem. With Pendle now available for trading on Bitrue, users can dive into this groundbreaking project and explore its possibilities in the DeFi landscape.
Start trading $PENDLE on Bitrue today and experience the future of yield-centric tokenization. Users may also enjoy up to 50% APR with no lock-up period when they stake $PENDLE in Power Piggy.
