Pendle is a protocol for tokenized future yield trading on the AMM system. Its purpose is to enable users to gain access to yield-generating assets and have the opportunity to generate additional yields while locking in future yields in advance. It also provides traders with direct exposure to future yield streams without requiring underlying collateral.
Pendle is a permissionless yield trading protocol where users can execute various yield management strategies.
Yield assets are divided into primary tokens (PT) and yield tokens (YT), allowing users to choose between earning fixed or flexible yields on Pendle v2 AMM.
PENDLE is the native utility token with use cases including:
Liquidity Bootstrapping: PENDLE rewards are used as an incentive to bootstrap protocol liquidity
Voting Power Channel: Locking PENDLE as vePENDLE for up to 2 years to vote on emission reward directions for different pools
Fee Accumulation: Locked vePENDLE holders can accumulate fees from two revenue sources
Swap fees generated from all swaps on Pendle AMM
Yield Token (YT) Fees. Pendle charges a 3% fee on all yields generated through YT, with 100% redistributed to vePENDLE holders.
The protocol consists of the following major components working in tandem:
Yield Tokenization: Base yield tokens are wrapped into SY (Standard Yield Tokens), then split into Primary Tokens (PT) and the yield component (YT).
Pendle v2 AMM: A capital-efficient design model capable of enabling PT and YT swaps using only a single liquidity pool (through flash swaps).
In April 2021, PENDLE raised $3.7 million in its seed funding round, representing 14.9% of the total supply at a FDV of $35 million.
As of June 30, 2023, the total supply of PENDLE is 251 million tokens, with approximately 140 million in circulating supply post-listing (around 56% of the total token supply).
As of June 2023, weekly emissions are 460,000 tokens, decreasing by 1.10% per week until April 2026. At this point, the current token economics allow for a final inflation rate of 2.00% annually as an incentive measure.
