The early integration of Pendle and Terminal Finance is not just another 'yield opportunity'; it marks the arrival of a new financial era. This article is sourced from a piece by Cheeezzyyyy, organized, translated, and written by Deep Tide TechFlow. (Background: Pendle is hard to understand, but not knowing it is your loss) (Additional context: Funding rates can also be traded! What are the features of Pendle's launch of Boros that 'tokenizes' perpetual contract fees?) For institutions, the dawn of native DeFi financial assets is breaking. The early integration of Pendle and Terminal Finance is not just another 'yield opportunity.' It signifies the arrival of a new financial era: the integration of TradFi and DeFi native financial assets at the most fundamental level. This is the harbinger brought by Converge: establishing strategic partnerships with Ethena and Securitize aimed at TradFi, paving the way for institutional capital entry. As TradFi begins to recognize the powerful synergies released by DeFi, the driving force behind it stems from a new theory of institutional adoption, propelling the arrival of this financial transformation. Led by Terminal Finance, combined with the front-end technology of Ethena and Pendle, the Converge ecosystem gathers the forces most aligned with institutional needs in the DeFi space. Its credibility stems not only from the speculative appeal of the market but also from a meticulously designed financial architecture: DeFi native infrastructure, deeply integrated with high composability, strong CeFi external distribution capabilities, and an enclosed institutional participation model. All of this constitutes a solid underlying structure, laying the foundation for a wider entry of institutional capital into the DeFi realm. Next phase: Formalization of the second layer. This phase marks the final program of externalizing the Converge ecosystem, aiming to create a system that fully aligns with traditional finance (TradFi), with core cornerstones including: Traditional financial strategic distribution channels, compliance regulatory frameworks, and institutional-level liquidity coordination mechanisms. Through a bottom-up design, Terminal Finance has become the liquidity hub core for Converge aimed at traditional finance, tailoring the entire financial architecture for institutional trading. The entire spirit defining the 'Money Legos' of early DeFi is based on one principle: composable liquidity. However, without deep, reliable, and accessible liquidity, composability is out of the question. And this is precisely where TerminalFi, as the cornerstone of the Converge ecosystem, fills this critical gap. It is not just an ordinary decentralized exchange (DEX) but an innovative platform designed specifically for institutional needs: Ecosystem core driver: Building a robust secondary market for institutional-grade assets and yield-bearing stablecoins. Capital efficiency priority: Reducing price drift and impermanent loss (IL) through optimized design, enhancing liquidity provision returns. Inclusive accessibility: Supporting both permissionless trading while gradually introducing KYC/KYB-compliant institutional-grade real-world asset (RWA) trading. It is evident that TerminalFi, as an institutional-grade financial native component, provides a unique and highly attractive value proposition. However, with Converge yet to launch a token roadmap, TerminalFi effectively acts as the closest native agent to capture the potential growth value of Converge. Strategic dual synergy choice: Pendle x Ethena. The YBS (yield-bearing stablecoin) theory of TerminalFi prompted its strategic choice of sUSDe as the core underlying asset, further solidifying this strategic direction with Pendle's simultaneous launch. This is no coincidence. @ethena_labs achieved over $6 billion in supply scale in less than a year, with Pendle Finance playing a crucial role in this growth: During the process of sUSDe supply increasing from $1 billion to $4 billion, over 50% of the sUSDe supply was tokenized through Pendle. At the supply reaching $6 billion, peak utilization rates hit 40%. The high sustained utilization rate on Pendle proves the market adaptability of tokenizing fixed income and floating income within a DeFi native portfolio. More importantly, this further highlights the strong synergy between Ethena and Pendle: the two propel each other, forming a lasting compound network effect loop that has far-reaching impacts on the entire ecosystem. But the synergy does not stop there. Ethena and Pendle's goals extend far beyond DeFi users. They are jointly targeting larger institutional market opportunities: Fixed income products: A market in traditional finance worth $190 trillion. Interest rate swaps: An even larger market segment, reaching $563 trillion. Through Converge's certified and regulated distribution channels, a key bridge connecting institutional asset allocators has already been built. This breakthrough provides institutions with broad access to crypto-native yield sources characterized by faster, more composable, and yield-centric designs. The success of this theory relies on innovative financial native assets and appropriately designed to leverage the upcoming macro tailwinds, and Ethena's sUSDe perfectly meets this requirement: The yield of sUSDe is negatively correlated with global real interest rates, which is starkly different from other debt instruments in traditional finance. This means that sUSDe not only survives in changing interest rate environments but also benefits and thrives from them. Current interest rates (approximately 4.50%) are projected to decline, and institutional portfolios are bound to face the challenge of yield compression—this further solidifies sUSDe's position as a logical alternative for preserving portfolio returns. In Q4 2020/21 and Q4 2024, the BTC financing spread exceeded 15% compared to real interest rates. What does this mean? From a risk-adjusted return perspective, sUSDe and its extended version iUSDe (the traditional finance packaged version) have a structural advantage. Coupled with its capital costs being significantly lower than traditional finance (TradFi), this presents potential 10x returns in the yet-to-be-developed traditional finance space. Dual synergy growth effect: The key role of Pendle. Next phase: Integration. Clearly, Ethena and Pendle are strategically aligned and moving towards the same ultimate goal: integration with traditional finance (TradFi). Since its establishment in Q1 2024, Ethena has successfully solidified its position in the DeFi native realm + CeFi middle ground with robust infrastructure: USDe and sUSDe assets cover over 10 ecosystems + top DeFi integrations through CEX.

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