Recently I have started to use @pendle_fi a lot. Honestly, it's one of those protocols that makes you rethink how DeFi works🧵 ‣ Have $7.1B locked up across 10+ different chains ‣ They're in the top 10 DeFi protocols by size ‣ Total revenue is $56M+ ‣ Trading volume has hit $47.5B total What surprises me is only few people have used it as many people don't understand it. For a protocol this big, that's a tiny user base. Most small projects have more users than that. Let me break it down in the most simplest terms. Before you start bookmark this for future reference! ➠ What is Pendle? Let's you buy a bond for $97 that pays you $100 in a year. You're getting your $97 back + $3 in interest. Normally, you can't separate these two things. You hold the bond, you get both. But what if you could split them apart + trade them separately. That's basically what Pendle does, with crypto yields. ➠ How does it work? Whenever you stake something in crypto (ETH, stablecoins, whatever), you're actually getting two things. 1. You're getting your original money back at some point 2. You're getting rewards along the way (interest, points, airdrops, etc). Pendle takes these two components and turns them into separate tokens you can buy and sell independently. The system works with three types of tokens. ➢ SY is just the wrapped version of your asset ➢ PT is the Principal Token, which represents your original money that you'll get back 1:1 when it matures ➢ YT is the Yield Token, which represents all the rewards and earnings during that period, but it expires worthless when the time is up This creates two completely different ways to play... 1. The safe route is buying PT You're essentially buying a discounted version of an asset that will be worth full price later. You just wait until maturity and collect the difference. No risk (assuming the underlying protocol doesn't blow up). Some people are getting ~75% annual returns just buying PT on certain assets. 2. The aggressive route is buying YT You're betting that the rewards during the period will be worth more than what you paid. This is huge for airdrop hunters. Let's say a project is giving points to stakers. ‣ If you stake normally, you get 1x points ‣ If you buy YT on Pendle, you can get 60-70x leverage on those same points with the same amount of capital But if the airdrop disappoints or doesn't happen, your YT expires worthless. It's a time-limited bet that goes to zero at the end. ➠ What makes this different from normal DeFi? Usually you deposit tokens somewhere, wait around, and get rewards. Pretty simple. With Pendle, you can customize exactly what you want. 1. Want safety and guaranteed returns? Buy PT 2. Want to gamble on airdrops with leverage? Buy YT 3. Want something in between? You can provide liquidity and earn fees from both sides. The mechanism works because different people want different things. ‣ Conservative players want to protect their capital and earn steady returns ‣ Aggressive players want to maximize airdrops and don't mind risk Pendle lets both groups trade with each other. The conservative people sell their yield exposure to the aggressive people at a discount and everyone gets what they want. ➠ Give me an example? Let's take $KAITO as an example as it will be the easiest one here. The staking gives you 6.6% APR. On Pendle, people buying PT are getting 74% APY. Because the YT buyers are paying a premium for potential airdrops, which makes PT cheaper. So if you're a small holder who probably wasn't going to qualify for airdrops anyway, you can just buy PT and collect that massive return instead. You're basically converting airdrops you weren't getting into real, guaranteed yield. Other than @KaitoAI, @USDai_Official. I personally am participating in the ecosystem of @ethena_labs like @Terminal_fi @strata_money so I'm farming their points too. ➠ What are the risks? ➢ You need to watch expiration dates closely ➢ Not every market has good liquidity (You might not be able to sell when you want to) ➢ If the underlying protocol has problems, both PT & YT suffer ➠ When should I buy? 1. When a project announces an airdrop, YT prices shoot up because everyone wants those points 2. This crashes PT prices because the two have to balance out each other You get a situation where you can either farm points with huge leverage OR buy the underlying asset at a significant discount. Both strategies can win, just in different ways. Even if you have 0 interest in airdrops, you can use PT to get much better returns than normal staking. You're essentially buying assets at a discount from people who are willing to give up that discount to chase airdrops. It's a market where different risk preferences create opportunities for everyone. ➠ Conclusion If you're actively farming yields or hunting airdrops in DeFi, Pendle is probably worth learning. It can amplify whatever strategy you're already running. But if you're just holding crypto longterm and not actively managing positions, the added complexity might not be worth it. The fact that it's userbase is still early means there's room to learn and benefit before it becomes mainstream. If you're going to be playing in DeFi anyway, understanding how Pendle works gives you more tools to work with. Take this piece as an informational update & not an investment thesis. If you still don't understand @pendle_fi I would suggest don't put money into things.

What are your thoughts on @pendle_fi guys? @hmalviya9 @snow949494 @belizardd @Hercules_Defi @DefiIgnas @Slappjakke @kenodnb @DeFiMinty @thelearningpill @TrycVerrse @Defi_Warhol @Louround_ @TheDeFiPlug @eli5_defi @0xAndrewMoh @DeRonin_ @0xTindorr @arndxt_xo @poopmandefi @0xCheeezzyyyy @Mars_DeFi @splinter0n @zerokn0wledge_ @satyaki44 @0xTanishaa @bullish_bunt @cryptorinweb3 @TheDeFiKenshin @DukeD_Defi