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The boys were in Singapore this past week for Token 2049 and had a chance to meet up with Dan Dangle from Pendle Finance. He was kind enough to sit down for an hour to talk about the protocol, its growth and get deep into the mechanics of how it functions.
Pendle allows any yield bearing token to be split into two parts, the yield and principal. These tokens can then be sold or traded on Pendle's trading platform. W
We covered Pendle in-depth a few weeks back and you should definitely check out our write up.
Samuel McCulloch
Pendle also was our #1 pick for yield farming this week on Monday, where we looked at the entire DeFi ecosystem to find the best opportunities for traders. Check out our write up that features Pendle.
Samuel McCulloch
Reflections on Token 2049
According to Dan, this year's Token 2049 was remarkably different from the last. Despite the bear market, the event radiated vibrancy and enthusiasm. The striking difference this time around was the diverse representation of sectors in crypto and the noticeable pouring in of money for side events.
Dan's Take on Pendle
Boasting a daily volume of $1M-$1.5M and a TVL of $150M, Pendle's user base mainly comprises DeFi pros, who leverage intricate strategies with money markets to hedge their token risk. While he can't be 100% sure because of psuedonymity of addresses, Dan thinks that 20% of Pendle's TVL originates from institutions.
Dan says Pendle is like owning a house and separating the rental income from the house's ownership. Through Pendle, one can sell the rental income rights to someone else. This type of asset split is common in TradFi, but Pendle is the first to do it at scale on chain.
There are three ways to use Pendle right now: Earn, Liquidity and Trade.
Pendle Earn offers users fixed yield in an easy to understand UI. Pendle Liquidity is a step up in complexity, but it allows users to generate SY tokens and sell the YT for more PT and add liquidity for traders. Pendle Trade offers a complex and detailed trading system for pros who understand the risks of trading PT and YT.
Hyper Growth
A year can make a considerable difference. Last year, Pendle was relatively unknown at Token 2049. Fast forward to today, and they are one of the premier Dapps in DeFi.
With investment by Binance, the protocol is well set to grow into the future and make its mark across all of crypto.
