MIIX Capital: Pendle research analysis report

Author: miix capital

1. Research Report Points

1.1 Investment logic and narrative

Cryptocurrency income transactions may be rich in profits, but the actual returns realized by investors are uncertain. This is because due to many factors in the encryption field, the yield market fluctuates, so it is impossible to accurately predict the future yield.

Various revenue agreements make investors profit from future income, but many established agreements have defects and may greatly reduce returns.PENDLE uses improved returns to optimize investors’ return.Pendle has become the vision of “Uniswap in the interest rate market”.

Investment points of the project include:

The market space is large.Interest rate interchange is mainly the derivative market led by the institution. The interest rate derivatives account for 80% of the market share of the derivative track.Tao has just been introduced by Pendle, and it is a very early stage.

PENDLE’s overall data is bright, and its transaction volume, TVL, and currency prices have reached a record high.

The organization must enter the Staking track. Whether it is a bank or hedge fund, Mutual Fund, ETF publisher, or ETF BROKERS, they have the risk of hedging interest rates.

PENDLE’s V3 version will introduce traditional interest rates into the chain, which will face a million -dollar market, we look forward to this PENDLE performance.

PENDLE currently depends on the development of the LRT track. The overall LRT track still has multiple growth space at the level of growth. Although PENDLE mostly depends on LRT, it will gradually reduce the proportion of LRT in the future because it is essentially facing the entire market for the entire market.Interest rate exchange tracks require the entry of institutions to help diversify their assets.

1.2 Valuation Description

In TradeFi, interest rate derivatives occupy most of the market’s position in the derivative market.In addition, with the development of Tradefi, the overall scale of the derivative market has gradually increased. As of June 2023, the overall derivative market has reached 71.47 trillion US dollars, and the interest rate derivatives have not reached the position of the position of the position of the position reached.5.737 trillion US dollars, accounting for 80.2%.

The interest rate on the chain is currently on the very early track of the derivatives. With the pledge of pledge entering Tradefi, the demand for this part will explode.

At present, PENDLE currency price has exceeded the highest height, and the growth space may no longer receive restrictions.Its main underlying tokens are LRT. If the current overall LRT market value is US $ 5.7 billion, and the TVL flowing into Pendle is 2.37 billion US dollars, including EETH (Ether.Fi) and WETH.

If the overall TVL of the LRT project rises five times, then PENDLE’s TVL will also have five times room to rise. With the introduction of the traditional interest rate market in 2024, the entry of TradeFi has the demand for the smooth income curve and hedge risk of Pendle, then the project’s project’s project, then the project’s project’s project, then the project’s project’s project, then the project’s project’s project, then the project’s project’s project, then the project’s project of the project, then the project’s project of the project, then the project’s project.There will be higher room for rising space.

1.3 Main risk

The risk of smart contracts, although PENDLE invites many audit institutions for auditing code, may still have vulnerabilities and cause all the funds to lose.

ETH spot ETF has not passed, which has a great impact on the overall pledged tradefi market.

When Pendle is facing extreme markets, there may be some unknown risks.

PENDLE is currently very dependent on LRT. If it cannot effectively expand the scope of business, a single risk exposure may be formed.

The liquidity of the protocol may have a serious insufficient liquidity of long -tail assets due to excessive tokens, causing liquidity to gather, which will not meet the rich arbitrage needs of some institutions, but this is a long -term problem.

2. The basic situation of the project

2.1 Business Scope

PENDLE is a blockchain project that focuses on yield tokens. Through its platform, users allow users to lock in the future return rate of crypto assets and get earnings in advance.This innovation method not only provides a new source of income for cryptocurrency holders, but also introduces more liquidity and flexibility to the interest rate market.PENDLE achieves this function through smart contract technology, and users can participate in the market in a decentralized and secure manner.

2.2 Founding Team

Founded in 2021, the team member Base is in Singapore and Vietnam. Currently, there are about 20 people registering in LinkedIn.

TN Lee(X: @tn_pendle): Co-Founder, once a member of the founding team and business leader in Kyber Network, and then went to a mining company Rockminer, which operates about 5 mines in the mining company.Dana Labs was established in 2019, mainly for FPGA customized semiconductors.

Vu nguyen(X: @gabavineb): Co-Founder, who once worked as a CTO in Digix Dao, has created Pendle with TN Lee with TN Lee.

Long vuong hoang(X: @UncleGrandpa925): Engineering director, obtained a bachelor’s degree in computer degree from the National University of Singapore, joined Singapore National University in January 2020 as a teaching assistant in May 2021, joined Jump Trading as a software engineering intern in January 2021.Pendle served as a smart contract engineer and was promoted as engineering director in December 2022.

Ken Chia(X: @imkenchia): Institutional director, obtained a bachelor’s degree from the University of Monash, once served as an investment bank interns at the second largest bank in Malaysia, and then served as an asset planning expert for private investment banks in Morgan Chase. He entered Web3 in 2018.He served as COO on an exchange, joined Pendle as an institutional director in April 2023, responsible for the institutional market -self -operated trading company, cryptocurrency fund, DAO/ protocol state treasury, and family office.

2.3 Investment background

The main investors of the project include MeChanism Capital, Hashkey, Bixin Ventures, Binance Labs, etc.

At present, investors can find investors including Spartan, Arthur Hayes, Hashkey, Alliance Dao, Falconx, etc.

2.4 Project development route and course

According to Twitter released by co -founder VU NGUYEN, PENDLE’s V3 version is planned to be launched in 2024. It contains traditional financial interest rate derivatives, which will cause great interest in TradeFi.The specific implementation details are temporarily unknown.

3. Products and business conditions

3.1 official website data (as of February 2024)

3.2 Social media data

3.3 Community data

4. Project analysis

4.1 code

The code of this product has been audited by multiple audit agencies.

The development of the project still maintains normal levels, and developers have remained stable.

4.2 Products

PENDLE is an income transaction agreement that does not require permission, and users can implement various revenue management strategies.PENDLE’s working principle is mainly divided into three parts: benefits token, Pendle AMM, and VEPENDLE. The details are as follows:

Benefit token

PENDLE innovatively transformed the income asset to the SY tokens, which is based on the ERC-5115: SY token standard.They are PT (Principal Token, principal tokens) and YT (Yield Token, income tokens).

PT tokens will not obtain any benefits, but can redeem basic assets at a ratio of 1: 1 at its maturity.

PT is similar to PO (only principal) securities or zero -interest bonds in Tradfi.

Income tokens represent the rate of return on the assets.

YT is similar to IO (interest) securities in Tradfi.

Pendle amm

Both PT and YT can be traded through the AMM of Pendle, which is the core engine of Pendle.On Layer2, the prophecy of the project is Redstone.PENDLE AMM realizes efficient DEFI income transactions: traders who want to earn fixed income to buy PT, and traders who want to do more income to buy YT.For the income token YT for a period of time, the process is as follows:

The process of wanting to sell YT tokens is as follows:

SY is the existence of SWAP pools as an intermediary asset, so LP providers need to provide YT-SY / PT-SY tokens.SY represents a standardized income tokens that can cover wider asset categories.This standardization increases the attractiveness to investors, because it provides more flexibility and the possibility of accessing more assets, which may attract more participants and provide higher liquidity. ThereforeProvide SY as an intermediary asset to provide the LP pool.

The liquidity provider can obtain benefits from the following aspects:

The drop cost generated by the mining pool

Pendle incentive measure

Protocols issued by basic assets (such as $ Comp, $ AAVE)

In PENDLE, the separation of the asset’s yield part (YT) and the principal (PT) allows investors to trade and manage independently. This separation mechanism brings some unique pricing and value changes:

Future income separation: When you buy PT, you actually give up any income that may be generated during the holding period, because this part of the income has been used through YT token and may be purchased by others.Therefore, the price of PT will reflect the lack of this income, and is usually purchased at discount prices below the full value of the target asset.But we agreed for a time, that is, YT can only reflect the income situation for a period of time.

时间价值与风险考量：投资者购买折扣的PT 是基于这样的预期，即他们现在以较低价格买入，期待在未来某一时刻，特别是到期时，其价值会上升并接近或等同于The value of the asset of the target.This expectation considers the influence of time value and the risk of holding PT until redemption.

Suppose there is a simplified example to illustrate the price of PT (principal token) and will eventually rise to the price of its corresponding asset (ST).

condition:The underlying asset (ST): a bond, the current market value is $ 100, the annualized interest rate is 5%, and it is one year before the expiration.PT initial price: Assuming that the initial transaction price of PT is $ 95 because of the separation of the income (ie YT part) in the next year.

process:Investment separation: On the Pendle platform, the holders of this bond decided to separate their income and principal and create PT and YT.Because YT represents the right to future income, the price of PT will be lower than the full -price bond (ST), reflecting the missing future income value.Time passes: Over time, bonds are close to its expiration date.Because YT has represented all the expected income during the period, the value of PT actually represents the principal recycling that can be obtained from the bond when it matches.Value recovery: As the maturity date is approaching, the market value of PT will gradually increase, because market participants expect that when the expiration is expired, PT holders will be able to redeem at the value of equivalent assets (ie bond principal) at the equivalent of the target asset (ie bond principal).Back to PT.If the face value of the bond is $ 100, the theoretically PT price should gradually rise to $ 100.

result:At the time of maturity, PT holders can use PT to redeem the principal of $ 100 equivalent.Therefore, although the PT was originally traded at a discount price (such as $ 95), its value will gradually increase over time and approaching the maturity date, and the full value of the assets of the target, that is, $ 100.Among the trading opponents, everyone is gambling or hedging in the future rate of return, and selling YT, which means a smooth future revenue curve, cash in advance, or seeing the future yield.The rate of return.Buying PT means that you can buy a certain degree of discount, and think that the rate of return during this period of time is loser.

Vependle

Introduce TradeFi’s interest rate derivative market to the chain, so that everyone can use it. VEPENDLE is the governance system of Pendle:

The longer the PENDLE time, the greater the corresponding VEPENDLE value.

The VEPENDLE value will be attenuated over time, but your lock duration can be extended to offset the attenuation.

The more vetendle you have, the greater the voting right.After voting to the mining pool, it has the right to obtain 80%of the exchange fee charged by the mining pool.

VEPENDLE holders can also get part of the agreement income, which come from exchange costs and YT costs.

4.3 Ecological development and data

At present, due to the existence of ST tokens, one series of ecology includes:

Penpie: Penpie is a DEFI platform launched by Magpie, which provides revenue and VEPENDLE incentive services for users of the Pendle platform.

EQUILIBRIA: Convert the idle Pendle to Ependle and earn pledge to earn benefits through the Ependle vault.

The above figure tracks PNP and EQB locks on Penpie and Equilibria, as well as their ownership of PENDLE govern tokens.This shows the level of control of VLPNP and VLEQB holders to the PENDLE protocol.VLPNP and VLEQB holders instruct PENDLE VEPENDLE’s allocation of governance proposals and measure weights.

Penpie accounts for about 12 million VEPENDLE for PENDLE, while Equilibria occupies about 7.7 million vetenedle to Pendle. At present, there are 32.7 million VEPENDLE. Then Penpie occupies 36.7%of Pendle governance rights, and Equilibria occupies approximately PENDLE governance. 23.5%of the power (23.5%(Data as of March 2024).

The number of transaction pens and transactions on the PENDLE protocol has also gradually increased, which means that the market has gradually increased the market’s demand for interest rate derivatives with the development of DEFI projects such as LSD, LSDFI, LRT, and RESTAKING.And as of March 7, 2024, its cumulative transaction volume also exceeded $ 4 billion, and its trend was gradually increasing.

In terms of TVL, the project has its own AMM pool and supports the exchange of various SY, PT, and YT tokens.At present, from the perspective of the currency and the U, it is gradually rising.

At present, with the help of STAKING development, people expect that the demand for the project will gradually increase, especially the possibility of the organization’s entry.Many institutions have begun to mention the income of Ethereum pledges. They generally believe that after the spot ETF is passed, TradeFi can collect active income on the pledged ETH chain, and can also charge the custody fees of the storeders.

So for PENDLE’s interest rate exchange products, it will have great demand, and because of its complete leading position in the interest rate track, it is also natural to introduce traditional interest rates to the chain in the future.The operation of interest rate derivatives will have a potential potential transaction volume.

The current PENDLE pool liquidity is gradually increasing.

Among all pools, the project is mainly based on the project of the LRT track, accompanied by factors such as the issuance of the currency of the LRT track project and the continuous hotness of the future STAKING track. This track will become a popular focus of the industry.It will be higher.At present, the main LRT track TVL is currently in the growth stage, which has a very direct promotion effect on the main pool’s PNEDLE.

4.4 Circuit scale and potential

Interest Rate Derivatives (IDR) belongs to the highest trading track in derivatives. Derivatives are a securities, and their price depends on or derived from one or more basic assets.Its value is determined by fluctuations of basic assets.The most common basic assets includeStocks, bonds, goods, currency, interest rates and market indexesEssence

In TradeFi, interest rate derivatives occupy most of the market’s position in the derivative market.In addition, with the development of Tradefi, the overall scale of the derivative market has gradually increased. As of June 2023, the overall derivative market has reached 7.147 trillion US dollars, and the interest rate derivatives have not reached the position of the position of the positioning of the position of the incomplete incoming position reached.5.737 trillion US dollars, accounting for 80.2%.

In interest rate -based derivatives, it is divided into three major categories, namely interest rate swap (SWAPS), FRA (FORWARD RATE AGREEEMENTS), Options, and other tools.About 81.2% of the market share.

In Tradefi, interest rate exchange is mainly the trading market led by the institution, and its transaction volume is extremely large.Interest rate interchange is a financial derivative product that allows the two parties to exchange their respective interest payment obligations.This exchange usually involves the exchange of fixed interest rates and floating interest rates.Interest rate exchange is widely used in the financial market. The main participants include:

Banking and financial institutions: Bank use interest rates to manage interest rate risks, adjust the interest rate structure of the balance sheet, and optimize capital use efficiency.Financial institutions also use them to arbitrage and hedge risk.

Enterprise: Enterprise uses interest rates to exchange risk of changes in the cost of hedging loan.For example, if a company is expected to rise in interest rates in the future, it may lock its interest expenses by entering a payment of a fixed interest rate and receiving floating interest rates.

Investors and hedge funds: They use interest rate swap as an investment tool or risk management strategy, seeking profit through the change of interest rates, or hedging the interest rate risk of other investment.

Government and public institutions: These entities may use interest rates to manage the costs and risks of their debt portfolio.By swap, they can more effectively match capital demand and debt service costs, while reducing the impact of interest rate changes.

Central Bank: Although it is not a conventional operation, under certain circumstances, the central bank may participate in the interest rate exchange market in order to affect the short -term interest rate as part of its monetary policy.

In the traditional financial world, interest rate derivatives are the largest derivative transaction category, and interest rate exchange accounts for 82% of the overall interest rate derivatives.The project is specially used for the interest rate interchange of the chain of Ethereum.

With the entry of traditional financial institutions, especially gray, JPMorgan Chase, and Black, which can provide a wide range of arbitrage opportunities for TRADEFI, which may be important for PENDLE investment in PENDLE investment.significance.

At present, currency and market value that supports benefits of benefits:

Ethereum mobile pledged tokens (such as WSTTH): At present, about 26% of ETH is in a pledge state, so all the tokens of this part can be performed. At present, the overall TVL of LSD is US $ 59.7 billion.

Tokens on behalf of the borrowing agreement (such as Compound or AAVE): For example, DAI pledged in Compound, known as CDAI, also has its own annualized return.The TVL of the lending business is about $ 34.3 billion.

LP tokens (such as GMX GLP): Whether it is GMX or GLP, as long as it is mortgaged, it has its own interest rate. Almost most of the DEFI projects have the income of LP tokens.

Lobricity Re -mortgage tokens (LRT) and RESTAKING tokens: For example, as of now, this part of Eigenlayer and Renzo Finance have a total of $ 17 billion in TVL.

Then, overall, the ceiling of this track is extremely high, and with the gradual entry of traditional institutions, the demand for Pendle will gradually strengthen.

The possible use cases used by institutions include:

Fixed income, such as earning fixed income on STETH;

Multi -header rate, for example, to buy more yields to bet on STETH rate of return;

Make more benefits without additional risks, such as providing liquidity with your STETH;

For example, in the RestAKing market of Eigenlayer, as EIGENLAYer’s storeders gradually increase, the future rate of return is high. Then, when you are currently at a high yield, you can choose to sell YT.Credit your yield.In the eyes of the organization, they can also lock the pledge income of STETH to hedge the problem of decline in yields caused by the active decline in the future chain.

5, tokens

5.1 Total amount and circulation

As of March 7, 2024, according to COINGECKO statistics, the current total tokens are 258,446,028, and the number of tokens currently circulating is 96,950,723.The current market value is US $ 298 million, and FDV is US $ 790 million.Liquidity incentives account for 49.3%of the overall tokens, the team currently accounts for 17.7%, while investors account for 12.1%.

Liquidity incentives are expected to last until the end of 2030. The official assumes that the annual inflation rate is 2%, a weekly decrease of 1.1%, until April 2026.The release diagram of the tokens is shown in the figure above. We expect to be the deadline for about May 1, 2025, and it will circulate about 270 million pieces. The overall growth will not be much.Essence

5.2 token economics

PENDLE’s tokens are mainly used for governance custody. It is called VEPENDLE. By using VEPENDLE, PENDLE holders can obtain a series of functions that can improve the practicality of the token.

Vependle’s value is proportional to PENDLE’s pledge amount and duration.The VEPENDLE value will be attenuated over time.VEPENDLE holders vote and guide the reward flow to different pools to effectively inspire the liquidity in the pools where they vote.

PENDLE charges 3% from all income generated by YT.At present, the cost is 100% assigned to the holder of Vependle, and the agreement does not charge any income.In addition, Vependle voters have the right to obtain 80% of interest rate exchange fees from the voting pool, which constitutesApy of the voterEssenceThe picture above is the latest voting situation. CRVUSD POOL occupies about 44% of the voting rights concentrated in this pool.As of March 7, 2024, there are currently 49.52 million locked on Pendle. Vependle, as a virtual token of voting rights and rights, has a total of 32.76 million, with an average locked 421 days.

5.3 Market performance and window period prediction

PENDLE’s current main liquidity pool is LRT, which is mainly based on the LRT project for analysis.

The above is the tokens of the LRT species. LRT relies on the tokens of RestAKing and LSD. Its market space RestAking currently has $ 11 billion, while LSD currently has 55.1 billion U.S. dollars.Gradually move towards mainstream financial institutions, and market space becomes wider.

So under the current circumstances, the LRT token has a market space of $ 66 billion. For Pendle, there is such a large market growth space at LRT. In addition, it also accepts tokens such as compounds such as compounds and other yield.In the future, the product introduced in the chain interest rate exchange, that is, Pendle V3, will be launched this year.

From the perspective of the rise in currency prices, its currency price growth also meets the development status of the Staking track.At present, the price of the currency has reached a record high, but its market value is only 300 million US dollars (currency price 3.11), and the full circulation is about 800 million US dollars. In May 2025, due to the problem of the release mechanism, the FDV can actually be considered as 3US dollars, so we believe that the token may have a great room for rise.

5.4 Profit expectation assessment

PENDLE currency price has exceeded the highest height, and the growth space may no longer be limited.At present, its main underlying tokens are LRT. If the current overall LRT market value is US $ 5.7 billion, and the TVL flowing into Pendle is 2.37 billion US dollars, including EETH (Ether.Fi) and WETH.

6. Value evaluation

The project is in a mature period, but the team is still improving its economic models and enhancing liquidity, and the possibility of exploring the possibility of interest rate interchanges introduced into traditional finance. We believe that it is expected to become Uniswap of interest rate derivatives.Far greater than the spot market, because most of them are institutional participation, and their transaction volume is very large.

Its competitive advantage is that it is the leader of the interest rate derivative track on the chain, and it also has its own ecology. It is currently in the absolute monopoly position of the track, and the overall track is also very early.

From the middle and long term, the chain will not only flourish in the spot market, but also pledge and re -pledge tracks will also develop rapidly. With the agency’s attention to Tradefi, the derivative market on the chain will also develop rapidly. PENDLE is currently unique to the unique.choose.

7. Summary

PENDLE is a blockchain project that focuses on yield tokens. It allows users to lock the future yield of crypto assets and obtain earnings in advance.This innovation method not only provides a new source of income for cryptocurrency holders, but also introduces more liquidity and flexibility to the interest rate market.PENDLE achieves this function through smart contract technology, and users can participate in the market in a decentralized and secure manner.

PENDLE’s investment points include:

The market space is very large. The interest rate exchange is the main derivative market of the institution. The interest rate derivatives account for 80% of the market share of the derivative track.The track on the chain has just been introduced by Pendle, and it is still very early.

PENDLE’s overall data is bright, and its transaction volume, TVL, and currency prices have reached a record high.

The trend of traditional institutions entering Staking, whether it is a bank or hedge fund, Mutual Fund, ETF publishers, or ETF Brokers, all have the risk of hedging interest rates.

The V3 version will introduce traditional interest rates into the chain, which will face a million -dollar market, and we look forward to this PENDLE performance.

Although Pendle currently depends on the development of the LRT track, the LRT track alone has multiple growth possibilities.In addition, PENDLE has the opportunity to gradually reduce the proportion of LRT in the future, because it is essentially the interest rate exchange track for the entire market, which requires the diversification of the entry of the institution to help its assets.The mutual demand for strong dependence is a very valuable investment target, and it is recommended that investors pay great attention.