Research Summary
The report discusses the rise of Pendle, a yield trading platform that has gained traction in the burgeoning LSD sector. Pendle’s success is attributed to its ability to tokenize and trade yield, allowing users to speculate on the yield of yield-generating assets. The platform’s integration of Liquid Restaking Tokens (LRTs) has been particularly successful, enabling users to leverage long airdrop opportunities, including EigenLayer.
Key Takeaways
Pendle’s Unique Yield Trading Model
- Tokenization and Trading of Yield: Pendle has gained popularity by allowing users to tokenize and trade yield. This unique model enables users to purchase assets at a discount and speculate on the yield of yield-generating assets.
Integration of Liquid Restaking Tokens (LRTs)
- Pre-Selling or Leveraging Long Airdrop Opportunities: Pendle’s integration of LRTs has been particularly successful, allowing users to pre-sell or leverage long airdrop opportunities, including EigenLayer. This has led to the creation of the largest markets on Pendle.
Positive Price Momentum for $PENDLE Token
- Fuelled by EigenLayer Hype: The success of Pendle’s product, particularly the hype around EigenLayer, has led to positive price momentum for the $PENDLE token.
Leveraged Airdrop Farming
- Yield Token Allows for Leveraged Point Farming: The Yield Token on Pendle allows for a form of “leveraged point farming”. This is due to the way LRTs are integrated into Pendle, allowing users to swap 1eETH for 9.6 YT eETH, which will accrue EigenLayer and Ether.fi points as though one was holding 9.6 eETH.
High Demand for LRT Markets
- Locking in an Airdrop in the Form of ETH-Denominated Yield: Given the large expected size of the EigenLayer airdrop and the high demand to farm said airdrop, it is no surprise that these LRT markets have gained the most traction on Pendle. This has led to yields north of 30% p.a for PT buyers.
Actionable Insights
- Monitor the Performance of $PENDLE: Given the positive price momentum for the $PENDLE token, it may be beneficial to keep a close eye on its performance and market trends.
- Research the Potential of LRTs: The success of Pendle’s integration of LRTs suggests that there may be potential in this area. It may be worth exploring other platforms that are leveraging LRTs or similar mechanisms.
- Understand the Impact of Airdrops: The report highlights the significant impact of airdrops, particularly EigenLayer, on the success of Pendle. Understanding the role and impact of airdrops could provide valuable insights into market trends and opportunities.
