Liquid Staking is one of the hottest narratives this year, with the overall TVL exceeding $20 billion. Pendle is a project we introduced in our previous article. It is a DeFi yield trading protocol deployed on Ethereum and Arbitrum.

As an "old" DeFi protocol that was launched in 2021, Pendle has been tepid in the first two years. It was not until the end of 2022 that it became popular with the popularity of the LSD (Liquid Staking Derivatives) sector. Its TVL began to rise all the way and has now exceeded US$150 million.

Just a few days ago (July 18), Pendle announced a new product called "Pendle Earn", which aims to simplify the generation of income and make it as simple as possible, hoping to attract as many people as possible to use Defi. So, how should Pendle Earn be used? Today, let's sort out the best strategies to use it!

Pendle Earn can be understood as a strategy that helps you make money with one click. It has an experience similar to CeDeFi, but it is completely on-chain and generates real income. If we summarize it in one sentence: it allows you to lock in your APY directly by purchasing PT at a discount relative to the underlying asset.

This makes it easier for most people to participate in DeFi. And because Pendle Earn is very simple to use, has a completely transparent strategy, and can provide a stable APY over a period of time, it will not only attract more retail investors, but also institutional investors.

The advantages of Pendle Earn are quite obvious, such as:

1. It solves the liquidity problem

Currently, some products that utilize "discounted assets" often bring liquidity pain points. However, Pendle Earn seems to have eliminated the liquidity problem by turning to the design of CeDeFi UI and building it directly on the chain.

We can imagine what would happen if institutional participants saw the CeDeFi-like interface below (as shown below)? I think they should be able to immediately understand how it works. And more importantly, because Pendle Earn is built directly on the chain, it will not fail to invest because of asset misappropriation like other centralized CEXs in the past (FTX is an example).

Moreover, there are currently multiple Earn products on CEX, allowing users to deposit ETH into these platforms to earn APY. It is worth mentioning that Pendle has been launched on Binance Launchpool at the beginning of this month. I think it will not be long before Pendle Earn is also integrated into Binance. At that time, more users may access Pendle Earn through the CEX UI. You can imagine what further growth it will bring.

2. It can provide more opportunities for YT traders

As more and more new users use Pendle Earn, the purchase volume of PT will surely continue to increase, and the price of PT will rise, which will create new buying opportunities for YT traders who think that the price of YT is undervalued.

Although the launch of the Pendle Earn product appears to be mainly a UI upgrade, it actually effectively differentiates user roles: YT traders and PT buyers. This will increase the demand for YT and PT.

Moreover, for new users, you don’t need to understand the relationship between DeFi fixed interest rate and DeFi yield, nor do you need to understand concepts such as AMM, implicit yield and PT mechanism that sound complicated. You can simply get started and participate in DeFi to obtain stable APY income. The simple operation process is shown in the figure below.

In addition, with Pendle's current TVL exceeding $150 million and still maintaining a rapid growth momentum, I believe that as more and more retail and institutional investors join, its TVL will soon reach $1 billion.

Well, that’s all I shared today through “Talking about Li and Beyond”. Let’s summarize and review it together. This article mainly briefly sorts out and introduces Pendle’s newly launched Pendle Earn. I hope today’s sharing can be helpful to everyone.

Special thanks to: 0xFinish, 0xTindorr, 0xTHades

Disclaimer: The above content is only a personal point of view and analysis, and is only for the purpose of popular science learning and communication among the majority of enthusiasts. It does not constitute any investment advice. Investment is risky, please treat it rationally, improve risk awareness, and abide by the relevant laws and regulations of the country and region where you are located!