BitHappy
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Bullish
The Next Step for Decentralized Exchanges: Spot/Contract Trading of Interest Rates!
This concept is inspired by Pendle. When I first encountered Pendle, I felt it was not quite suitable for traditional DeFi players, but more for traders.
In simple terms, Pendle divides tokens into Yield Tokens (YT) and Principal Tokens (PT), with Yield Tokens (YT) being tradable.
This means that the price of YT is influenced not only by the yield of the underlying asset but also by market factors.
What is being speculated on Pendle is the rise and fall of future interest rates of tokens, whereas current trading primarily speculates on the rise and fall of the underlying asset. Separating Yield Tokens makes them perfectly applicable to the current spot/contract logic of exchanges.
Previously, the conditions were not very mature, but recently, PT and YT have been appearing more frequently in Twitter and Web3 articles. Many DeFi protocols are innovating based on Pendle, and various arbitrage strategies are already utilizing PT/YT.
For example, ListaDao's clisBNB previously launched Pendle, and the latest lending can use PT-clisBNB. There are also arbitrage strategies targeting Berachain's BERA/BGT that can combine shorting on exchanges and holding PT/YT for mining arbitrage.
The adoption and support of these protocols for Pendle may very well allow Pendle to gradually become the next core protocol of DeFi, and it has recently doubled to $PENDLE , although it is still a bit away from its peak.
But just like the initial concept, the next step for decentralized exchanges is to facilitate spot/contract trading of interest rates.
Pendle's YT represents the yield portion beyond the underlying asset, and theoretically, all tokens that can generate interest can be split into YT tokens, thereby creating a trading platform based entirely on YT.
Moreover, YT originates from DeFi, making it inherently more suited for on-chain applications and more appropriate for DEX.
As on-chain exchanges gradually mature and Pendle's adoption expands, is a hopeful future on the horizon?
This concept is inspired by Pendle. When I first encountered Pendle, I felt it was not quite suitable for traditional DeFi players, but more for traders.
In simple terms, Pendle divides tokens into Yield Tokens (YT) and Principal Tokens (PT), with Yield Tokens (YT) being tradable.
This means that the price of YT is influenced not only by the yield of the underlying asset but also by market factors.
What is being speculated on Pendle is the rise and fall of future interest rates of tokens, whereas current trading primarily speculates on the rise and fall of the underlying asset. Separating Yield Tokens makes them perfectly applicable to the current spot/contract logic of exchanges.
Previously, the conditions were not very mature, but recently, PT and YT have been appearing more frequently in Twitter and Web3 articles. Many DeFi protocols are innovating based on Pendle, and various arbitrage strategies are already utilizing PT/YT.
For example, ListaDao's clisBNB previously launched Pendle, and the latest lending can use PT-clisBNB. There are also arbitrage strategies targeting Berachain's BERA/BGT that can combine shorting on exchanges and holding PT/YT for mining arbitrage.
The adoption and support of these protocols for Pendle may very well allow Pendle to gradually become the next core protocol of DeFi, and it has recently doubled to $PENDLE , although it is still a bit away from its peak.
But just like the initial concept, the next step for decentralized exchanges is to facilitate spot/contract trading of interest rates.
Pendle's YT represents the yield portion beyond the underlying asset, and theoretically, all tokens that can generate interest can be split into YT tokens, thereby creating a trading platform based entirely on YT.
Moreover, YT originates from DeFi, making it inherently more suited for on-chain applications and more appropriate for DEX.
As on-chain exchanges gradually mature and Pendle's adoption expands, is a hopeful future on the horizon?
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.