DeFi
Pendle’s Record TVL propels it to 5th place in DeFi
Pendle Finance continues to climb the ranks of the decentralized finance (DeFi) industry. The protocol’s total value locked (TVL) reached a new record high on June 11 at $6.71 billion. For a time, Pendle became TVL’s fifth largest DeFi project, according to data tracked by ChallengeLlama.
As of this writing, Pendle is battling for fifth position with JustLend and Ether.fi. Pendle and JustLend currently have a TVL of $6.5 billion, followed by Ether.fi with $6.3 billion.
Pendle TVL has surged 2,700% year to date. As of early January, $233 million worth of crypto was locked using the protocol.
Pendle Finance is a DeFi project that allows users to tokenize future returns from DeFi assets. The yield can be converted into tokens and traded on the Automated Market Maker (AMM) exchange in Pendle.
The protocol separates DeFi investments into core tokens (PT), which represent the underlying asset, and yield tokens (YT), which represent the return on the asset. Returns and principal may be traded on the Pendle Open Market. This offers DeFi yield farmers new strategies to speculate on yield and lock in future rates of return.
The protocol’s approach can be compared to the operation of interest rate derivative markets in traditional finance.
One of the main factors behind Pendle’s rapid rise is the popularity of liquid restaurant tokens, with Pendle users able to speculate on Clean diaper returns and points. Pendle RightSide Developer said Coindesk in March:
“The influx of interest in [Liquid Restaking Tokens] has been the main driver of Pendle’s recent growth.
Pendle supports six chains, including Ethereum, Arbitrum, Mantle, BNB Chain, Optimism, and Avalanche. Ethereum accounts for around 90% of the protocol’s TVL, with WETH, EETH, and USDE being the three most popular crypto assets locked with it.
The protocol’s native token is PENDLE, with a market capitalization of $836 million.
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