Podcast Summary
This episode of the “SEND IT!” features Dan, the growth lead at Pendle, a DeFi protocol that focuses on interest rate derivatives. The discussion delves into Pendle’s core concept of splitting yield-bearing assets into yield tokens and principal tokens, the improvements introduced in Pendle V2, and the protocol’s growth strategy. The podcast also explores Pendle’s fundraising efforts, collaborations with centralized parties, and future plans.
Key Takeaways
Pendle’s Unique Approach to DeFi
- Conceptualization and Launch: Pendle was conceived during the 2020 bull market as a way to lock in fluctuating DeFi yields. The protocol launched its V1 in mid-2021, showing promise despite a chaotic development process.
- Core Concept: Pendle splits yield-bearing assets into two separate tokens: a yield token that receives all the yield and a principal token that represents the initial capital. This allows users to lock in fixed rates on yields or speculate on more volatile yields.
- Improvements in Pendle V2: Pendle V2 introduced a single AMM for both yield and principal tokens, concentrated liquidity, and enhanced tokenomics with vePendle. The protocol’s complexity was addressed with a separate UI called Pendle Earn, which abstracts away the complexities and presents a familiar interface to users.
Understanding Pendle’s User Base and Capital
- User Base: Pendle has a monthly active user count ranging from 3,000 to 6,000, with fluctuations based on market conditions. Most of Pendle’s user addresses interact with the simpler UI, but over 80% of the capital comes from the pro UI.
- Total Value Locked (TVL): Pendle has a TVL of approximately $230 million. The team is strategizing to transition from appealing to DeFi DJs to attracting institutional players or high-net-worth individuals to scale the protocol to a $10 billion TVL.
Pendle’s Growth Strategy
- Institutional Capital: Pendle is actively reaching out to funds and working on integrations with other protocols to increase TVL. They are also considering partnerships with wallet custodians to facilitate institutional investment.
- Marketing Efforts: Pendle’s growth strategy has involved inorganic marketing efforts, such as collaborating with smaller content creators and leveraging VC connections to generate buzz. The team credits the success of Pendle’s V1 to launching during a bull market, which made marketing easier.
Tokenomics and Community Engagement
- Tokenomics: Pendle adopted a ve (vote-escrowed) model, which incentivizes stakeholders to participate and deepen liquidity. The ve model is effective when there is an incentive for protocols to participate, as seen with Curve.
- Community Engagement: The importance of community engagement on platforms like Crypto Twitter and the role of education in sparking initial growth for the protocol were discussed. The guest emphasized the importance of a core community for growth.
Future of Pendle
- Integration with Centralized Wallets: Pendle Earn, a simplified UI version of Pendle, is integrated into several centralized wallets like OKX, Bitget, and Coin8, providing fixed yields to users and allowing these platforms to earn a spread.
- Long-term Vision: Pendle’s long-term vision is humorously yet seriously described as becoming the custody solution for tokenized rates if JP Morgan were to tokenize T-bills.
Sentiment Analysis
- Bullish: The podcast presents a bullish sentiment towards Pendle, highlighting its unique approach to DeFi, the improvements introduced in Pendle V2, and its growth strategy. The guest’s optimism about Pendle’s future, including collaborations with centralized parties and the potential to tap into a broader audience outside of the typical DeFi user base, further contributes to the bullish sentiment.
- Bearish: There is no explicit bearish sentiment expressed in the podcast. However, the guest acknowledges the challenges of building in a tough market and the strategy to stay relevant, which could be interpreted as a cautious outlook.
- Neutral: The podcast maintains a neutral stance when discussing the broader crypto market, acknowledging the uncertainty in predicting the future focus of Pendle and the potential impact of market trends. The guest also emphasizes the importance of diligence, hard work, and motivation for new builders in the crypto space, reflecting a balanced view of the industry’s challenges and opportunities.
