Pendle allows you to **trade future income (yield)** from staking. Main actions:

1. Split the asset into PT and YT

For example, you have **stETH** (a token from Lido with staking income from ETH). You can:

- Deposit stETH into Pendle

- Receive:

- **PT-stETH** (Principal Token) — the token of the principal amount

- **YT-stETH** (Yield Token) — a token for future income

👉 After 6 months, PT-stETH can be exchanged for 1 stETH (if the term has expired), and YT-stETH gives you all the accumulated income for that period.

2. **Trading or hedging**

- **Sell YT** → get money **now**, giving up future income (hedging).

- **Buy YT** → receive income without investing in the principal asset (speculation on rising APY).

- **Buy PT** → cheaper than the current price of stETH, but in the end, you will receive the full stETH (if income was high — it's profitable).

💰 How to earn with PENDLE?

Here are 5 ways to earn through Pendle:

✅ 1. **Staking PENDLE → receiving vePENDLE (voting + rewards)**

To maximize benefits, you need to stake PENDLE in the ve (vote-escrowed) system.

- Stake PENDLE for up to 4 years → you will receive vePENDLE

- vePENDLE gives:

- Voting rights in governance

- Access to **protocol rewards** (up to 100%+ APR)

- Discounts on fees

- Participation in **liquidity boost** (boosted farms)

> 🔥 The more vePENDLE, the more you receive from liquidity pools.

✅ 2. **Farming in liquidity pools (LP farming)**

Pendle offers pools where you can:

- Add liquidity (for example, PT-USDC or YT-USDC)

- Receive LP tokens

- Stake them and receive **rewards in PENDLE**

Example:

- Add **PT-stETH + USDC** to the pool

- Get an LP token

- Stake it → receive **PENDLE every 2 weeks**

> 💡 Some pools have **APR from 20% to 100%+**, especially if you have vePENDLE (boost).

✅ 3. **Arbitrage: buying YT at a discount**

If an increase in yield is expected (for example, ETH APY will rise), you can:

- Buy **YT-stETH** cheaply (before the rise)

- Hold until the term ends → receive all accumulated income

- Or sell for profit on the market

> It's like betting on future APY.

✅ 4. **Buy PT at a discount (cheap stETH)**

Sometimes **PT-stETH** trades cheaper than the current stETH.

- Buy PT-stETH for $3000 (while stETH costs $3200)

- Wait for the term to end

- Exchange PT for **full stETH** → profit $200

> Risk: if the income was low, YT investors will lose, but PT remains valuable.

✅ 5. **Trading on the Pendle Market (speculation)**

You can trade:

- PT vs PT (for example, PT-stETH for USDC)

- YT vs YT

- Use the Pendle Router

for exchange

> Suitable for traders who analyze future yield rates.