Crypto degen who loses money when market goes up and down. Researching new web3 projects and sharing how to interact with them to get drops
Crypto degen who loses money when market goes up and down. Researching new web3 projects and sharing how to interact with them to get drops
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Disclaimer: This post does not constitute financial advice. The Web 3 space is fraught with risks. Please conduct thorough research before venturing into this domain.
Pendle is a decentralized protocol that pioneers the tokenization and trading of future yield streams from DeFi platforms. It ingeniously divides the token provided to DeFi into two components: Yield Token (YT) and Principal Token (PT).
YT Token: The Yield Component
The YT token represents the yield component of an underlying yield-bearing asset. For instance, when we deposit our ETH into yield-generating protocols such as Swell, we receive a swETH token that generates a 3.5% APR on our deposited ETH. Pendle further innovates by splitting this token into a YT that generates a 3.5% APR and a PT that represents the underlying ETH.
PT Token: The Principal Component
The PT token represents the principal amount of the deposited asset. It’s important to note that every contract has a maturity date. When this date arrives, the YT token will lose all its value and become zero, while the PT token will be equivalent to the amount of the underlying asset.
The Financial Game of Tokens
Usually, YT tokens are sold at a significant discount. For example, for 1 ETH, you can get 30 swETH YT with a 1-year maturity date. After 1 year, purcahsed YT tokens will have no value, but you risk it for a 3.5% APR on 30 tokens. On the other hand, PT tokens are sold at a slight discount. For example, for 1 ETH, you can get 1.05 PT swETH. After 1 year, your token will become 1.05 ETH, yielding a 5% annual profit. It’s crucial to remember that the yield rate of tokens is not stable, so the APR can increase to 10%, and buyers of YT tokens will profit, while holders of PT tokens lose, and vice versa. This dynamic creates a fascinating financial game.
Airdrops and Beyond
Moreover, most of these tokens provide points for future airdrops, so YT tokens may yield more than a 3.5% APR but provide more with airdrops. So this make this financial game even more complicated, so you have to try to predict potential airdrop yield to make desicion which token to buyt for max profit.
Uniqueness of Pendle in Web 3
This unique feature makes Pendle a standout in the Web 3 space because it allows users to tokenize their future yield from various DeFi platforms, a feature not available in traditional Web 2 applications. This tokenization of future yield streams creates new opportunities for yield optimization and risk management.
Exploring Similar Apps
There are apps similar to Pendle. For example, you can try Splice on the Mode blockchain, a relatively new app that has an airdrop program.
Links to Applications:
Pendle:
Splice:
#web3apps
Disclaimer: This post does not constitute financial advice. The Web 3 space is fraught with risks. Please conduct thorough research before venturing into this domain.
Pendle is a decentralized protocol that pioneers the tokenization and trading of future yield streams from DeFi platforms. It ingeniously divides the token provided to DeFi into two components: Yield Token (YT) and Principal Token (PT).
YT Token: The Yield Component
The YT token represents the yield component of an underlying yield-bearing asset. For instance, when we deposit our ETH into yield-generating protocols such as Swell, we receive a swETH token that generates a 3.5% APR on our deposited ETH. Pendle further innovates by splitting this token into a YT that generates a 3.5% APR and a PT that represents the underlying ETH.
PT Token: The Principal Component
The PT token represents the principal amount of the deposited asset. It’s important to note that every contract has a maturity date. When this date arrives, the YT token will lose all its value and become zero, while the PT token will be equivalent to the amount of the underlying asset.
The Financial Game of Tokens
Usually, YT tokens are sold at a significant discount. For example, for 1 ETH, you can get 30 swETH YT with a 1-year maturity date. After 1 year, purcahsed YT tokens will have no value, but you risk it for a 3.5% APR on 30 tokens. On the other hand, PT tokens are sold at a slight discount. For example, for 1 ETH, you can get 1.05 PT swETH. After 1 year, your token will become 1.05 ETH, yielding a 5% annual profit. It’s crucial to remember that the yield rate of tokens is not stable, so the APR can increase to 10%, and buyers of YT tokens will profit, while holders of PT tokens lose, and vice versa. This dynamic creates a fascinating financial game.
Airdrops and Beyond
Moreover, most of these tokens provide points for future airdrops, so YT tokens may yield more than a 3.5% APR but provide more with airdrops. So this make this financial game even more complicated, so you have to try to predict potential airdrop yield to make desicion which token to buyt for max profit.
Uniqueness of Pendle in Web 3
This unique feature makes Pendle a standout in the Web 3 space because it allows users to tokenize their future yield from various DeFi platforms, a feature not available in traditional Web 2 applications. This tokenization of future yield streams creates new opportunities for yield optimization and risk management.
Exploring Similar Apps
There are apps similar to Pendle. For example, you can try Splice on the Mode blockchain, a relatively new app that has an airdrop program.
Links to Applications:
Pendle:
Splice:
#web3apps
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