Location, December 01, 2022 — Pendle, a DeFi yield trading protocol, has announced PendleV2, which will significantly improve the current version of Pendle, enabling it to become the Uniswap platform but for yield swaps. According to the announcement, Pendle V2 will provide users with an enhanced user experience, permissionless asset integration, improved AMM for capital efficiency and vePendle.
Pendle, which aims to bring the $6T Fixed income industry into DeFi, is the first yield trading protocol that gives owners the reins to their yield-bearing assets. By separating assets into a Principal Token (PT) and Yield Token (YT), the tokens can be traded in any way, giving users control over their exposure to yield rates and unlocking the potential of yield as a new building block in DeFi.
The new UI enables simple mode that will allow users to simply buy PT without the intricacies happening in the backend while pro mode enables advanced strategies such as fixed yield for low-risk stable returns, leveraged exposure to future yield streams without the need for collateral, or a combination of the mentioned strategies.
The team also introduces EIP-5115 that enables the seamless and permissionless integration of any yield asset onto the protocol. This means that anyone can create a yield market with any yield-bearing asset just like how anyone can create a token market on Uniswap. This also reflects the core ethos for decentralized finance, with the team relinquishing control to the users to create markets and provide a more dynamic ecosystem.
To further enhance permissionless growth, Pendle has upgraded their AMM improving its capital efficiency up to 200x while minimizing impermanent loss. The system will also generate four revenue streams for liquidity providers that will benefit everyone using the AMM.
Pendle is also introducing vePENDLE as their governance token, inspired from Curve’s veCRV but with additional upgrades, which includes reward boosting, incentive channeling, and fee redistribution. vePENDLE holders will be able to dictate incentive flow on chosen pools and get boosted yields.
Pendle’s next main focus is on community growth and development. While the protocol has existing partnerships, the launch of V2 received support from additional prominent DeFi protocols such FRAX, Convex, Lido, Kyber Network and LooksRare. Furthermore, Pendle is backed by known VCs and has been subjected to 4 independent audits by reputable auditors. The Pendle team have shown that they are committed to working with other organizations in the space and scale for a better DeFi ecosystem.
In response to the question about why V2 was necessary, the platform replied, “Pendle is building the foundation for the future of yield trading. Pendle is also inviting stakeholders who will value and contribute to the development of such an ecosystem. With DeFi and Web3 allowing ownership of infrastructure, everyone must have the opportunity to join at ground zero, on equal terms, in order to align incentives.”
Looking forward, The team is discussing partnerships with a handful of new protocols, and is also considering expanding to new chains for growth. There are additional talks of attracting treasuries and fund managers to explore Pendle’s institutional use case and eventually break into the trillion-dollar fixed income market.
With their native AMM, Pendle is a DeFi yield-trading protocol running on the Ethereum and Avalanche blockchains with over $350M in trading volume since its launch. Pendle enables the permissionless tokenization and trading of yield to obtain fixed yield or gain leveraged yield exposure without the risk of liquidation. With Pendle, traders can earn more yield and lock in future yields without providing underlying collateral.