Pendle

Pendle, a decentralized finance (DeFi) protocol, was initially introduced in November 2020 under the name "Benchmark." It was co-founded by TN Lee, Vu Nguyen, GT, and YK. The platform was later rebranded as Pendle and officially launched in July 2021.

Pendle is built on the Ethereum blockchain and allows users to trade, yield farm, and provide liquidity for tokenized yield assets. The protocol's native token is PENDLE, used for governance and staking within the platform.

In September 2021, Pendle raised $3.5 million in a funding round led by Mechanism Capital, which was used to further develop the protocol and expand its user base. This was followed by the launch of Pendle V2 in October 2021, introducing new features such as multi-collateral pools and an improved user interface.

Since its launch, Pendle has continued to grow in popularity, with a total value locked (TVL) of over $200 million as of May 2023. The platform has formed partnerships with other leading DeFi protocols, such as Aave and Curve, to expand its reach and offer users more options for yield farming and liquidity provision.

Pendle Finance is a decentralized yield trading protocol that operates on the Ethereum blockchain. It allows users to tokenize and trade future yields from yield-bearing assets, such as Aave and Compound, by splitting them into two tokens: Principal Tokens (PT) and Yield Tokens (YT). This tokenization enables users to manage their assets more flexibly and engage in various yield strategies.

1. Deposit Assets: Users deposit their yield-generating assets, such as aTokens from Aave, into Pendle.
2. Token Minting: Pendle mints two tokens:
   • Principal Token (PT): Represents a claim to the deposited principal and can be redeemed for the full underlying asset at maturity.
   • Yield Token (YT): Represents a claim to the future yield generated by the underlying asset until maturity. After maturity, YT holds no value.

1. Trading YT: Users can trade YT tokens to gain exposure to future yields without having to post their own assets as collateral on another protocol.
2. Liquidity Provision: Users can provide liquidity to Pendle's AMM by pairing YT with the underlying asset. This earns them additional trading fees and protocol rewards.
3. Interest Rate Swaps: YT holders can sell their tokens to immediately lock in returns at a fixed interest rate, simulating a traditional interest rate swap.

Pendle's Automated Market Maker (AMM) is designed specifically for time-decaying assets like YT. It adjusts the AMM curve at each timestep to accurately price time-sensitive assets, preventing mispricing and ensuring liquidity pools remain robust.

1. vePENDLE: Users can lock up PENDLE tokens to receive vote-escrowed PENDLE (vePENDLE), which carries voting and economic power.
2. Voting and Rewards: vePENDLE holders govern the platform, earning rewards from 3% of all yield accrued by YT. Holding vePENDLE enhances rewards by up to 250%, promoting decentralization and rewarding loyal community members.

• Time-Decaying AMM: Pendle's AMM accounts for time decay, optimizing capital and preventing potential financial losses due to mispriced assets.
• Tokenization: Pendle tokenizes future yields, allowing users to trade and manage their assets more flexibly.
• Governance: vePENDLE holders govern the platform, ensuring community involvement in decision-making.

Pendle's codebase has been fully audited by reputable auditors, and all flaws have been addressed. The platform is open-source, allowing anyone to monitor the codebase and flag potential issues.

Pendle (PENDLE) has several strengths that make it a unique and valuable platform in the decentralized finance (DeFi) space:

1. Tokenization and Trading of Future Yield: Pendle allows users to tokenize and trade future yields, providing a new layer of flexibility in managing yield income. This enables investors to optimize their returns by trading future yields based on their market outlook and risk appetite.

2. Advanced Yield Management: The platform offers advanced yield management strategies, including fixed yield, long yield, and hedging against yield volatility. This allows users to maximize their returns in various market conditions.

3. Risk Management: Pendle provides real-time risk metrics and historical data to help users make informed decisions about their investments. These metrics include historical volatility, asset correlation, liquidity depth, and collateralization ratio, ensuring transparency and informed decision-making.

4. Governance Participation: PENDLE token holders can participate in the platform's governance process, voting on proposals related to platform upgrades, parameter settings, and other key decisions. This ensures that users have a direct say in the future direction of the platform.

5. Flexibility and Accessibility: Pendle's liquidity provision feature offers flexibility, allowing users to choose which pools to provide liquidity to based on their risk tolerance, investment goals, and market conditions. Additionally, the platform provides educational resources to help users understand risk metrics and make better investment decisions.

6. Security and Transparency: Pendle conducts regular audits and provides detailed information about the risks and rewards of using the platform, ensuring a secure and transparent environment for users.

These strengths make Pendle a pioneering protocol that enhances the functionality and accessibility of financial services in the blockchain space.

Pendle (PENDLE) carries several risks that investors should be aware of:

1. Volatility Risks: The cryptocurrency market is highly volatile, and prices can fluctuate rapidly. This volatility can result in significant losses if not managed properly.

2. Protocol Hacking and Withdrawal Risks: As with any decentralized platform, there is a risk of protocol hacking and the withdrawal of funds from pools. Additionally, hacking the Pendle web interface can also be a concern.

3. Impermanent Loss Risks: When providing liquidity, users are exposed to impermanent loss risks. However, if they hold the liquidity tokens until maturity, this risk is mitigated.

4. Composability Risks: Pendle's automated market maker (AMM) model integrates with other protocols like Aura and Balancer, which can lead to composability risks. If there are any issues with these integrated protocols, it can affect Pendle's liquidity pools.

5. Smart Contract Risks: There is a risk associated with the smart contracts and systems deployed by third-party protocols that Pendle interacts with.

6. Yield Token Risks: The value of yield tokens (YT) can collapse, resulting in significant losses if users are unable to redeem their tokens at the expected rate.

7. Liquidity Risks: Users can lose a portion of their investment if the rate of liquidity tokens (LP) collapses.

8. Governance Risks: The governance system, vePENDLE, can be affected by the actions of token holders, which may impact the protocol's functionality and token value.

These risks highlight the importance of thorough research and due diligence before investing in Pendle Finance.

Yes, Pendle (PENDLE) has raised funds through several funding rounds. Here are the details:

• Strategic Funding Round (April 16, 2021): Pendle raised $3.7 million in a private funding round led by Mechanism Capital. Other contributors included Crypto.com Capital, Hashkey Capital, Spartan Group, imToken, DeFi Alliance, LedgerPrime, and several others.

• Strategic Funding Round (August 23, 2023): Pendle had another strategic funding round, but the details of this round are not disclosed.

These funding rounds have contributed to Pendle's overall financing, which totals $3.7 million. The investors involved in these rounds include Mechanism Capital, Crypto.com Capital, Hashkey Capital, Spartan Group, imToken, DeFi Alliance, LedgerPrime, and others.

• TN Lee: Co-founder and CEO of Pendle Finance.
• Vu Nguyen: Co-founder of Pendle Finance.
• GT: Pseudo-anonymous team member.
• YK: Pseudo-anonymous team member.
• Dan Anthony: Part of the team, mentioned as a co-founder alongside TN Lee.
• Long Vuong Hoang: Co-founder.
• Kevin Tseng: Head of Institutional at Pendle.
• Anton Buenavista: Employee at Pendle.
• Ken Chia: Employee at Pendle.
• Paolo Luis Dioquino: Employee at Pendle.