The Pendle protocol enables the permissionless tokenization and trading of yield. Pendle allows anyone to purchase assets at a discount, obtain fixed yield, or long DeFi yield. PENDLE is the platform token of Pendle, and is the cornerstone of value accrual mechanics and management of the protocol.
$PENDLE Governance: staking and locking PENDLE into vePENDLE lets users participate in governance decisions. Boost LP rewards: Holding vePENDLE can increase liquidity provider rewards by up to 2x. Revenue share: vePENDLE holders receive a share of the protocol's revenue from options trading fees. Vote for pools: vePENDLE holders can vote for pools to receive incentives and influence liquidity distribution. fee share: Users holding vePENDLE can receive a portion of swap fees generated by voted pools.
vePENDLE: Holders of vePENDLE seek to boost pool rewards, receive protocol incentives, and share in the revenue of Pendle Finance as the demand for DeFi yield markets rise.
Pendle enables users to split yield-bearing assets into their principal and yield components, principal token and yield token, allowing these to be traded separately. Creating a yield market in DeFi, Pendle unlocks the full potential of yield, enabling users to execute advanced yield strategies: - Buy assets at discount - Fixed yield for low-risk, stable growth - Gain long exposure to future yield
Value accrual to token: vePENDLE holders are entitled to a cut of protocol revenue collected, including a volume-weighted share of swap fees from voted pools (80%), 3% of YT yield fees, and all yields after maturity of YT/PT. Value accrual to protocol: None mentioned.
The business model for Pendle finance: Revenue comes from: 80% of swap fees, 3% of tokenized yield, and yields after maturity of YT/PT. Revenue is denominated in: ETH, WBTC, DAI, USDC, PENDLE emissions Revenue goes to: Liquidity providers receive 20% of swap fees. vePENDLE holders receive the remaining revenue, distributed pro rata based on vote weight and vePENDLE balance.
|Problems & Solutions
Problem: DeFi investors struggle to access discounted assets, fixed yield, or long DeFi yield due to the absence of permissionless yield markets. Solution: Pendle Finance protocol enables easy access to yield markets through permissionless tokenization and trading of yield, including Uniswap pools. Pendle V2 upgrade and EIP5115: Standardized Yield (SY) simplify DeFi yield market growth, while vePENDLE utilities, such as channeling protocol incentives, add value for PENDLE token holders.
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