With the successful upgrade of ETH Shanghai, the transformation of ETH to POS mechanism has also stimulated the comprehensive development of the pledge track, thus deriving a new track LSDFI and a new leading currency Pendle
LSDFI new track, huge potential
If we were to say which track is likely to become a hot topic in the next bull market, then the staking (LSD) track would definitely be on the candidate list. The change in the POS mechanism has greatly increased the staking income of ETH. The demand for ETH staking is increasing day by day. The ecology of the LSD track is becoming more and more mature. The good environment has also given rise to the new track LSDFI. A large number of staking derivatives and high-quality liquidity have poured into the new track.
LSDFI=LSD+DEFI is the most promising narrative in the entire DEFI. With a large amount of active liquidity, the LSDfFI protocol allows LSD holders to put their assets to use and maximize their income by providing additional opportunities to generate income, such as Lido's stETH, Frax's frxETH, RPL's rETH, etc. LSDFI is designed for this type of asset. Through layers of nesting dolls, it improves LSD capital efficiency and achieves a type of protocol with higher returns.
At present, LSDFI is in a very early stage. After the upgrade in Shanghai, the pledged funds of LSD are about 16 billion US dollars, while the pledged amount of LSDFI is only about 400 million US dollars. There is still a lot of room for growth. With the continuous development of the track, more and more liquidity is pouring in, and the development potential is very good.
LSDFI leading coin Pendle
Pendle is a permissionless yield trading protocol where users can execute various yield management strategies. Simply put, it is a platform that allows users to opt out, hedge or even increase their profits by providing various options. , thus providing users with the next level of revenue control
The first practical application of Pendle is to buy coins at a discount by prepaying the future POS staking return rate. Simply put, if the current ETH staking annualized return rate is 5%, then 1 ETH can generate 0.05 ETH interest per year, which is about 80U at the current price. If you are willing to stake your ETH in Penlde for more than 1 year, you can buy ETH in advance at a 9.5% discount. Of course, you cannot withdraw money during the staking period.
Such a mechanism is very attractive to long-term investors. If you are a long-term investor, do you think this transaction is worthwhile?
Pendle Staking Rewards
DeFi is a complex ecosystem with a high barrier to entry due to its technical nature. What I like most about Pendle is that I can read a white paper and understand the product in an hour.
Pendle charges a 3% fee on all revenue generated by YT. Currently, 100% of this fee is distributed to vePENDLE holders, and the team does not receive any income
vePENDLE powers the incentive mechanism on Pendle, where vePENDLE holders vote and direct rewards to different pools, effectively incentivizing liquidity in the pools they voted for.
If you do LP in a pool while holding vePENDLE, your PENDLE rewards and the rewards of all your LPs will also be further increased, up to 250% based on the value of your vePENDLE.
This will create a revenue flywheel, the more vePENDLE you put in, the more incentives you are entitled to. As tokens are locked, the supply on the market decreases, and LP increases to 250%, don’t you want to participate in staking?
Pendle Market Value and Circulation Rate
Data from Coinmarketcap shows that Pendle's circulating market value is only 150 million US dollars, which is not high, but its circulation rate is above 90%, so the subsequent selling pressure will be very low. Combined with the growth potential of the track and the project itself, the overall growth potential is very good.
Summarize
Good narrative, a new track with extremely high growth potential, a large amount of active liquidity, a high pledge return rate, a low market value, a high circulation rate, and small subsequent selling pressure. As the LSD sector continues to grow, the derivative track LSDFI will also gain more liquidity. Overall, Pendle has very good development potential and is a high-quality currency worthy of attention.