PENDLEUSD
PENDLE / United States dollar
crypto Composite

Pendle is a protocol that enables the trading of future yield for a yield-generating token through its AMM system. It achieves this by splitting an underlying yield generating token in to its Ownership Token (OT) and future Yield Token (YT). YT represents the yield of the underlying asset and can either be sold to earn the future income immediately, or purchased to be exposed to pure yield of the underlying. Both YT and OT can be further used to provide liquidity into Pendle to earn extra yield. Pendle is a protocol that enables the trading of tokenized future yield on an AMM system. To use the protocol, a yield-generating token (like aUSDC and cDAI) is deposited into the pool, this will be minted into an ownership token (OT) and future yield token (YT). The yield accruable by the YT can be sold upfront for cash, or offered as liquidity for the Pendle AMM which generates more yield. If the YT is sold, the subsequent interest revenue from the token will be transferred to the new YT owner. Redeeming the Underlying Token The underlying token can be redeemed before the expiry of the contract by providing same amount of OT and YT that was initially minted. However, after the expiration of the contract, only OT is required to redeem the underlying token since the YT will have a value of zero given that it has a time decaying property. Pendle AMM The Pendle AMM is uniquely designed to carter for time-dependent impermanent loss that arises when tokens with time decay (decline in accrued value of tokens over time) are used for liquidity provision. To address the problem, the Pendle AMM adopts a dynamic model that allows the AMM curve to shift to the equilibrium point and adjust itself duly to account for the time decay. This helps to retains the time-dependent value of the yield token until expiry of the contract.