What is Pendle Finance: A Game-Changer in DeFi?

What is Pendle Finance: A Game-Changer in DeFi?

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At its core, Pendle redefines yield trading through tokenization, introducing a time-decaying Automated Market Maker (AMM) that optimizes returns and provides unmatched flexibility.

DeFi protocols are constantly pushing boundaries to offer users more dynamic instruments. Pendle Finance is looking to make its mark in this space, pioneering yield tokenization on the Ethereum blockchain. 

According to Pendle Finance, the protocol steps in to optimize investor returns with its unique approach.

Introduction to PendleFi

Pendle Finance emerges as a decentralized project on Ethereum, pioneering yield tokenization. 

Pendle’s Total Value Locked (TVL) has soared past $457.15 million, solidifying its position as a key player in the LSDFi narrative. 

Pendle Finance TVL (Source: DeFiLlama)

Binance’s listing of PENDLE in its innovation zone catapulted Pendle into mainstream consciousness, even amidst predictable whale maneuvers during the initial retail release.

Pendle’s approach to yield trading involves tokenizing yield through a unique time-decaying Automated Market Maker (AMM). This approach empowers users to trade yield tokens, earning fixed yields on their assets. With Pendle, principal, and yield are split through tokens, creating a unique asset management opportunity.

Understanding Pendle’s Mechanism

Pendle operates as a permissionless yield trading protocol on the Ethereum blockchain. When users deposit assets, Pendle mints Principal Tokens (PT) representing the underlying asset and Yield Tokens (YT) representing its future yield. This approach reportedly allows users greater flexibility to manage their assets and engage in various yield strategies.

Further, in contrast to traditional AMMs, Pendle’s AMM accounts for time decay, preventing potential financial losses due to mispriced assets. The model optimizes capital while increasing exposure to future yields through incremental adjustments that accurately price assets, ensuring liquidity pools remain robust.

PENDLE Token: Powering Pendle’s Ecosystem

PENDLE, as Pendle’s native token, serves as the backbone of the yield trading protocol. Users providing liquidity can lock up PENDLE, receiving vePENDLE tokens with both voting and economic power. 

vePENDLE holders govern the platform, earning rewards from the 3% fee on all yield accrued by YT. Holding vePENDLE enhances rewards by up to 250%, fostering decentralization and rewarding loyal community members.

Tokenomics 

With a maximum supply of 231,725,335 tokens, PENDLE follows a hybrid inflationary model. A revised token distribution allocates 65.1% to circulation, 19.2% to the ecosystem fund, 10% to incentives, and 5.7% to the team. Weekly emissions decrease until April 2026, ensuring a controlled supply.

Source: Pendle Docs

Team and Funding

Pendle was conceived by anonymous individuals known as TN Lee, GT, YK, and Vu. Headquartered in South Korea, the project raised $3.7 million from prominent investors, including Bitscale Capital and Crypto.com Capital. Since its official launch in June 2021, Pendle has witnessed substantial growth in trading volume and TVL.

Pendle’s Roadmap

Pendle stands out with its three components – yield tokenization, AMM, and governance. Within a year of launch, over $350 million in yield trades were settled. Pendle V2, released in late 2022, introduces fixed-rate trading, enhanced efficiency, and greater capital flexibility. 

Future plans include permissionless integration with all yield-bearing assets, and aligning incentives for increased fees and liquidity.

Disclaimer: Overall it is vital to proceed with caution when purchasing tokens that have just been listed. For those who have not already read our articles on safety in the BSC it is crucial to reference the following items, HERE and HERE.

This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $1500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.

Disclaimer: The content in the above article is a press release, provided by a third party. Readers should do their own research before interacting or engaging with the mentioned companies and/or any related services. BSC News is neither directly nor indirectly responsible for any damage or loss caused or alleged to be caused by or in connection with the use of any content, goods or services mentioned in the above article.

Disclaimer: Overall it is vital to proceed with caution when purchasing tokens that have just been listed. For those who have not already read our articles on safety in the BSC it is crucial to reference the following items, HERE and HERE.

This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $2500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.

Disclaimer: This is a paid Ask Me Anything (AMA), BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement AMA for $2000 Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the AMA.

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Disclaimer: The content of this piece is the opinion of the writer. Nothing in this article is intended to constitute financial advice. The content of this article is intended for entertainment and educational purposes only. Investing in cryptocurrency carries a high degree of risk. Capital is at risk, and returns are never guaranteed. You should always do your own research.

Disclaimer: Disclaimer: This article is written by a visiting author. Opinions herein are those of the visiting author. Nothing in this article is intended to constitute financial advice. The content of this article is intended for entertainment and educational purposes only. Investing in cryptocurrency carries a high degree of risk. Capital is at risk, and returns are never guaranteed. You should always do your own research.

Author

Soumen Datta

Soumen Datta

Soumen Datta

Soumen is an experienced writer in cryptocurrencies, DeFi, NFTs, and GameFi. He has been analyzing the space for the last several years and believes there is a lot of potential with blockchain technology, even though we are still at an early stage. In his spare time, Soumen enjoys playing his guitar and singing along. Soumen holds bags in BTC, ETH, BNB, MATIC, and ADA.

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