Pendle Finance (@pendle_fi): The Stablecoin Yield Powerhouse.
What Pendle Does: pendle is a blockchain protocol that splits yield-generating assets into two parts:
• principal tokens (pt): represent the original asset; you get your money back at maturity, like a bond.
• yield tokens (yt): capture the interest or profit from that asset; you can trade them or speculate.
this lets users lock in fixed returns, bet on future yields, or hedge risks.
works on $ethereum, $arbitrum, and more, using automated market makers (amms) to trade these tokens.
Pendle’s Shift to Stablecoins:
over 80% of pendle’s markets and tvl (total value locked) are now in stablecoins (cryptos tied to the dollar like usdt, usdc).
Reasons for this shift:
• predictable returns: stablecoins are low-volatility, appealing for safe earnings.
• institutional interest: banks and big investors prefer stable returns, sometimes using leverage to boost yields.
• integration with other protocols: pendle partners with platforms like @aave, @Morpho, and @ethena_labs to tokenize yields.
pendle has processed over $69 billion in yield trades, mostly in stablecoins.
Key Stablecoins on Pendle – USDe & sUSDE (@Ethena):
USDe: synthetic stablecoin backed by staked crypto + hedged positions, generating yield naturally.
example: pt-usde gives fixed returns, while yt-usde lets traders speculate on yield changes.
users can earn 10-20% apy, often more with leverage.
sUSDE: staked version of USDe for higher yields.
underlying apys ~4-5%, pt fixed apys up to 13%, yt leveraged exposure up to 45x.
markets hold tens of millions in tvl; ethena’s usde supply reached $12 billion by late 2025.
The September 2024 TVL Dip – Learning Moment:
a major usde market expired, dropping pendle’s tvl from ~$6-7B to ~$2B.
why: pt holders redeemed principal, yt holders collected yield; plus yields compressed.
recovery was quick as new markets opened; tvl rebounded to ~$3B, showing defi’s resilience.
Why Yield Drives Capital:
users follow the highest risk-adjusted returns.
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