Sun Ge has recently attracted the attention of the community because he took a large-scale arbitrage operation, buying Pendle PT tokens and enjoying an annualized return of nearly 20%. This article will briefly explain the source of the benefits of this operation, discuss the relevant risks, and provide some risk avoidance strategies.

Sun Ge's arbitrage operation

According to the monitoring of analysts Yu Jin and Ai Yi, Sun Ge recently performed the following operations:

A total of 33,000 ETH was invested in Ethereum re-staking projects that expired on June 27, namely: Ether.fi: 20,000 ETH to buy 20208.93 PT-weETH; Puffer: 10,000 ETH to buy 10,114.11 PT-pufETH; Kelp: 3,000 ETH to buy 3025.91 PT-rsETH.

This means that if Sun Ge holds these investments until maturity, he can redeem the corresponding value of ETH. Simple calculation, if the exchange rate is 1:1, he will get 1% of the return in 22 days, which is 17.33% annualized.

Pendle's PT token provides similar characteristics to short-term debt on the chain, with good liquidity and redemption close to cash value, so it has attracted the attention of investors such as Sun Ge.

PT income source

Pendle is a permissionless income trading protocol that is achieved by packaging interest-bearing tokens into standardized interest-bearing tokens and splitting them into two parts: principal tokens (PT) and income tokens (YT). PT represents the principal part, while YT represents the income part. The price of PT is relatively low because the monetary value of YT is separated.

Methods to avoid price risks

Although this operation has attractive returns, using Pendle also has smart contract risks, operational risks, and price risks. In order to avoid price risks, strategies such as borrowing coins and shorting can be considered. For example, you can open a short hedging order on the exchange to prevent price drops, or adopt the principal protection strategy proposed by Alvin, borrow money to buy PT, and ensure that the income can cover the borrowing cost.

In summary, Sun Ge's arbitrage operation attracted attention under Pendle's high yield, but investors should pay attention to potential risks and adopt corresponding avoidance strategies. #5月非农数据即将公布 #山寨季何时到来？ #孙割超能力

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