What Is Pendle (PENDLE)?

Pendle is a yield-trading protocol developed on the Avalanche and Ethereum blockchains that works on the DeFi system. Avalanche is a decentralized blockchain platform with open smart contracts functionality. This protocol allows trading and tokenization of the future yield that creates products for itself as collateral. By creating a native AMM that supports tokens with reducing time value, Pendle is building a new DeFi derivative to expand the ecosystem and token pairs.

The platform allows lenders to lock in future yield and generate additional yield while allowing traders to gain exposure to future yield streams. This project offers many features, including:

• Accessibility: Supports multiple assets and protocols and lets users manage their yield on one platform seamlessly.

• Flexibility: Lets users deposit and withdraw their capital as per their suitability.

• Fully On-Chain: Smart contracts maintains and verify all the transactions offering complete transparency between the platform and users. As stated in its whitepaper, the Pendle system works on three components, i.e., Tokenization of Yield, Pendle's Automated Market Maker (AMM), and Governance. Two tokens are issued to tokenize future yield, OT and YT. Ownership token consists of transferrable underlying assets. Future yield token represents entitlement of the future yield. Users can deposit YT and OT in the liquidity pools to get PENDLE tokens and swap fees in return. Liquidity pools help users trade cryptocurrencies on decentralized exchanges (DEX).

PENDLE is the utility token of the Pendle platform used to function governance. The token governance of the platform enabled by the team is the allocation of liquidity incentives, creation of new market pairs, and usage of treasury funds. This ERC-20 token has taken the initiative (Pe, P) and (Pa, P) to reward long-term token holders and provide liquidity. This initiative has three objectives; increasing liquidity of the PENDLE, rewarding token holders for their contribution, and offering liquidity to the protocol.