Pendle Coin Explained: A Restaking DeFi Platform

In the first half of 2023, LSD (Liquid Staking Derivatives) services drew a lot of attention along with Ethereum's Shanghai upgrade.

• Pendle Finance is one of the key projects in restaking.
• The core idea of Pendle is to tokenize future yield at the present moment and trade it.
• Since its V2 update, Pendle Finance has reached a TVL of $67M and continues to grow rapidly.

Introducing Pendle Finance

Pendle Finance is a DeFi project launched in 2021. Pendle improved on existing DeFi models by tokenizing interest income.

Pendle Finance supports major blockchain networks such as Ethereum and Avalanche, and uses cross-chain compatibility and an automated market-making mechanism for efficient yield trading.

The Core of Pendle Coin: Principal Tokens (PT) and Yield Tokens (YT)

One of Pendle Finance's key features is Yield Tokenization. This means separating the principal and the interest of an interest-bearing asset (Yield-Bearing Token) and issuing each of them as its own token.

For example, if you stake 100 DAI on Compound, you can separate the interest from the principal and issue a PT (Principal Token) and a YT (Yield Token) for each. This lets users manage and trade their interest income and principal separately.

To sum up, Pendle Finance has principal tokens (PT) and yield tokens (YT). PT represents the principal of the underlying asset, while YT represents the interest income generated by that asset.

• PT (Principal Token): Represents the principal of the underlying yield-bearing asset and is redeemed 1:1 for the underlying asset at maturity.
• YT (Yield Token): Represents the yield of the underlying asset. By holding YT, you can earn trading profits or receive interest.

Through this two-token structure, investors can sell or buy tokenized future interest income at its present value, lock in fixed returns, and adjust how much exposure they have to variable interest rates.

Pendle Finance Outlook

Riding the restaking boom, Pendle Finance has reached a TVL of $67M. Its token price has also risen sharply, putting it at the forefront of DeFi yield tokenization.

In particular, the Pendle V2 update improved the platform's capital efficiency and lowered the barrier to entry for users. Fully understanding Pendle Finance isn't easy, but thanks to its user-friendly interface and tutorials, it looks like users will be able to join restaking and earn yield with ease.

How to Buy Pendle Coin

Pendle coin $PENDLE is currently listed on global exchanges such as Binance, Bybit, and OKX. You can buy Pendle coin by sending USDT from the Bithumb exchange to one of these exchanges.