PENDLE

Pendle Finance is a decentralized finance (DeFi) protocol that enables the tokenization and trading of future yield from interest-bearing assets. Founded in October 2020 by TN Lee and Vu Nguyen, the platform was officially launched in June 2021. The company's leadership brings significant experience from the blockchain sector; CEO TN Lee was a founding team member at Kyber Network, and CTO Vu Nguyen previously served as Lead Smart Contract Developer and CTO at Digix, specializing in asset tokenization. Their collective background in decentralized exchanges and tokenizing real-world assets laid the groundwork for Pendle's core functionalities.

The protocol operates by separating yield-bearing assets into two distinct components: Principal Tokens (PT) and Yield Tokens (YT). PT represents the underlying principal of the asset, which can be redeemed at a 1:1 ratio upon maturity, effectively creating a zero-coupon bond-like instrument for DeFi. YT represents the future yield generated by the asset, allowing users to trade or speculate on interest rate fluctuations without holding the underlying principal. This mechanism provides users with strategies for managing their yield, such as securing fixed returns by holding PT or longing yield by purchasing YT. The platform caters to both retail and institutional DeFi participants seeking to manage yield volatility or access more sophisticated financial instruments.

Pendle generates revenue through trading fees on its proprietary Automated Market Maker (AMM) and by collecting a 3% fee on the yield accrued by YT holders. The AMM is specifically designed to handle time-decaying assets, optimizing capital efficiency. The protocol operates on multiple blockchain networks, including Ethereum, Arbitrum, and BNB Chain. The native utility token, PENDLE, is used for liquidity incentives and governance. Users can lock their PENDLE tokens to receive vePENDLE, which grants them voting rights on protocol decisions, a share of the protocol's revenue, and boosted rewards for providing liquidity.

Keywords: yield tokenization, DeFi protocol, interest rate swaps, fixed income, yield trading, decentralized finance, principal token, yield token, automated market maker, blockchain finance, crypto yield, vePENDLE, TN Lee, Vu Nguyen, yield derivatives, liquidity provisioning, crypto interest rates, asset tokenization, on-chain yield, yield management