Aave's latest rollover debate centers on something called a PT. What is it?
🧠 In plain words
Pendle splits a yield-bearing token into two parts: a principal token (PT) and a yield token. The PT trades at a discount and redeems at full value on a set date. It is like buying a gift card worth $100 for $97 that you can only spend next February: your return is the gap.
✅ What it means for you
• A PT's yield is fixed if you hold it to maturity
• Borrowing against PTs only pays when the PT yield beats the loan rate, which CryptoSlate says is not true today for the proposed February USDG PT on Aave
• At maturity, positions must be rolled or closed, adding cost
$PENDLE is the token of the protocol behind these markets.
One-line takeaway: fixed yield is simple, leverage on top of it is not.
#Pendle #DeFi
🧠 In plain words
Pendle splits a yield-bearing token into two parts: a principal token (PT) and a yield token. The PT trades at a discount and redeems at full value on a set date. It is like buying a gift card worth $100 for $97 that you can only spend next February: your return is the gap.
✅ What it means for you
• A PT's yield is fixed if you hold it to maturity
• Borrowing against PTs only pays when the PT yield beats the loan rate, which CryptoSlate says is not true today for the proposed February USDG PT on Aave
• At maturity, positions must be rolled or closed, adding cost
$PENDLE is the token of the protocol behind these markets.
One-line takeaway: fixed yield is simple, leverage on top of it is not.
#Pendle #DeFi