Pendle Explained: Unlocking Yield Trading

Pendle is a decentralized finance (DeFi) protocol that enables users to tokenize and trade the future yields of their DeFi assets. It splits yield-bearing assets into two distinct tokens: Principal Tokens (PT), representing the underlying asset, and Yield Tokens (YT), representing the future yield generated by that asset. This structure allows users to implement various yield strategies, such as locking in fixed yields, taking long positions on yield, or hedging against yield drops. Pendle operates across multiple blockchains, including Ethereum, Arbitrum, and BNB Chain. Its native token, PENDLE, supports liquidity incentives and governance through a staking mechanism called vePENDLE.

How Does Pendle Work?

Pendle allows users to trade and manage future yields on DeFi assets by:

• Tokenizing Yield: Yield-generating tokens are split into Ownership Tokens (OT) — which represent ownership of the original asset — and Yield Tokens (YT) — which represent the right to receive future yields.

• Trading and Yield Strategies: Users can buy or sell these tokens to either earn immediate income (by selling YT) or gain exposure to future yield streams (by buying YT). This flexibility supports strategies like longing or shorting yield, offering diversification and opportunities to capitalize on changing yield conditions.

• Providing Liquidity: Users can supply liquidity to Pendle’s pools to earn additional rewards, supporting the platform’s smooth operation.

• Yield Optimization and Hedging: The platform helps users optimize returns or hedge against yield fluctuations, with plans to integrate more yield-related financial products over time.

• Governance and Staking: The PENDLE token grants holders governance rights and can be staked to earn rewards, aligning incentives and allowing users to influence the protocol’s future development.

Overall, Pendle empowers users to actively manage and trade the yield on their DeFi assets, opening up new financial possibilities.

How to Store Pendle (PENDLE) Tokens

You can securely store Pendle tokens using several wallets, such as:

• DappRadar Wallet: A compatible wallet that supports Pendle tokens.

• BYDFi Wallet: Custodial storage with the option to withdraw to your own wallet.

• Metamask: A popular Web3 wallet supporting multiple blockchains and tokens.

• KuCoin Wallet: Store directly within your KuCoin account or transfer to a non-custodial wallet for more control.

• Trust Wallet: Add Pendle tokens via the custom token feature, selecting the Ethereum network and pasting the Pendle contract address.

Each option offers a balance of security and convenience depending on your preferences.

How to Buy Pendle (PENDLE) Tokens

Buying on Centralized Exchanges (CEX):

1. Create an Account: Register on an exchange like Binance, Coinbase, or KuCoin and complete identity verification.

2. Fund Your Account: Deposit fiat currency via card, bank transfer, or other payment methods, then buy a cryptocurrency like USDT, ETH, or BNB.

3. Purchase Pendle: Find the PENDLE trading pair (e.g., PENDLE/USDT), select your order type (market, limit, etc.), enter the amount, and confirm the trade.

Buying on Decentralized Exchanges (DEX):

1. Set Up a Wallet: Download a Web3 wallet like Metamask or Trust Wallet and create a wallet.

2. Fund Your Wallet: Transfer ETH, BNB, or another required token from your exchange account to your wallet address.

3. Connect to a DEX: Visit the DEX platform and connect your wallet.

4. Swap Tokens: Choose the token you want to trade from (e.g., ETH) and select Pendle (PENDLE) as the target token. Enter the amount and confirm the swap through your wallet.