Thanks to the popularity of LSDfi, Pendle’s TVL has grown by an astonishing 550% this year. Crypto KOL Jake Blockinghor believes it has the potential to become the Uniswap of the DeFi yield market and has interpreted the Pendle protocol and latest data.
Pendle is an open-source protocol that enables users to execute various yield management strategies. It has three main products: 1) yield tokenization; 2) bracketed AMM; and 3) vePendle. The core of Pendle is yield tokenization. Essentially, they split the yield asset into YT = yield rate and PT = principal.
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The protocol has two sources of revenue. Swap fees – from Pendle’s AMM. YT fees – charging a 3% fee from all accrued and outstanding PT yield of existing YT. Treasury: Pendle doesn’t have such a “treasury,” but 14% of the initial supply is allocated to the ecosystem fund. Current value: 46 million, 0.43/PENDLE. Total of 19.6 million USD.
There are two main tokens that support the ecosystem: PENDLE and vePENDLE. Holders lock their PENDLE for vePENDLE for the following reasons: to receive a portion of protocol revenue; to vote for mining pools to direct incentives; and to collect swap fees from the voting pool. The supply of PENDLE is a hybrid inflation model. Weekly emissions will decrease by 1.1% each week until April 2026. At this point, the current token economics allow for a final inflation rate of 2% per year for incentives.
Reference: https://twitter.com/jake_Blockinghor/status/1666097674968522753
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