New Listing Highlight: Pendle. Introduction | by Bitrue | Jul, 2023

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.

How Does Pendle Work?

Minting and Trading

Pendle allows users to mint two types of tokens: XYT and OT. This process involves depositing aToken as collateral. OT (ownership token) represents ownership of the underlying aToken, while XYT (future yield token) represents the future yield of the underlying aToken. XYT Minters have two options: they can sell XYT tokens or add them to the XYT liquidity pool in exchange for LP tokens, earning liquidity incentives.

XYT tokens can be bought or sold on the market. When ownership changes, the new XYT owner becomes entitled to the subsequent interest revenue tied to the underlying aToken. XYT tokens can be traded until their expiry date, but they have no value after expiry. The OT holder can choose to roll forward to a new expiry and repeat the process or redeem the underlying asset.

Redeeming the Underlying Asset

To redeem the underlying aToken before the contract expiry, the user must possess both OT and XYT tokens. The OT holder can obtain XYT tokens by purchasing them from the market or withdrawing them from the liquidity pool. With both OT and its corresponding XYT tokens in their wallet, the user can successfully redeem the underlying aToken from Pendle, reclaiming their initial collateral.

What are the Benefits of Pendle?

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.

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.

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.