The emergence of Decentralized Finance (DeFi) has embarked on the journey of rebuilding the financial system, asserting its potential to be an independent financial system. In a robust and mature capital market, revenues can be bought and sold with bond coupons, interest swaps, or other financial instruments. Pendle Finance (PENDLE) aims to help reach this next turning point in DeFi.
What is Pendle Finance?
Pendle Finance is the first DeFi protocol that allows the trading of tokenized future yields in an automated market maker (AMM) system. It aims to provide the owners of yield-generating assets with the opportunity to generate additional returns and lock future returns in advance, while offering investors direct exposure to future return streams without the need for basic collateral.
Pendle Finance is built upon first-degree DeFi protocols. Currently supporting Aave and Compound, the protocol is expected to integrate more platforms in the future. There are three main components that make up Pendle Finance’s system: AMM, governance, and hedgers.
Aiming to provide holistic and hassle-free yield management on a single platform by supporting numerous protocols and assets, Pendle Finance has a transparent process between it and investors. All transactions on the network are conducted and verified by smart contracts (dApps), indicating an honesty-based operation.
PENDLE Coin Review
The protocol’s operating logic is quite simple. The user mints XYT and OT by depositing aToken through Pendle Finance. OT represents the ownership of the underlying aToken, and XYT represents the future yield of the underlying aToken. The XYT miner can add XYT to the XYT liquidity pool or sell it in exchange for LP tokens to earn liquidity incentives. XYT tokens can be bought or sold, and after a change in ownership, the right to subsequent interest income tied to the base aToken is transferred to the new XYT owner.
PENDLE coin is a utility token that can be used in governance transactions once Pendle Finance matures sufficiently. Serving a key role in the protocol’s value accrual mechanism and governance, the PENDLE coin adopts a hybrid inflation model. The emission starts with fixed incentives of 1.2 million PENDLE per week for the first 26 weeks, then liquidity incentives decrease by 1% per week until the 260th week. At this point, a terminal inflation rate of 2% annually is based on the circulating token supply.
How to Buy PENDLE Coin?
The maximum circulating supply limit for the end of the second year is restricted to 251,061,124. The circulating supply of PENDLE coin listed on Binance and at the time of writing this article is 231,725,335. Increases in supply are facilitated by liquidity incentives.
PENDLE coin can be bought and sold quickly and securely through Binance, the world’s largest cryptocurrency exchange in terms of trading volume. To buy PENDLE coin, you first need to register on Binance (if not already a member) and then deposit fiat money. After depositing fiat currency like the Turkish lira, US dollar, or Euro onto the exchange, the PENDLE coin can be purchased through the trading pairs it operates on.
Trading for PENDLE coin will start on Binance on July 3, 2023, at 13:00.
