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Pendle’s PP

It’s hard to believe it’s been less than a year since we introduced Pendle to the world.

Since launch, we have supported various types of yield-bearing assets: money markets, x-tokens, LP assets, and rebasing frog coins. The first iterations of Pendle have given us many insights and eureka moments that would not have been possible just 6 months ago.

Many nights of discussions have cumulated into a vision that will be the next generation of the Pendle that we know and love, with improvements to every aspect that matters.

The Pendies are building towards a future that is not constrained by walled gardens. We want to enable permissionless support for every yield-bearing asset under the sun, even those not yet created.

Each iteration we’ve introduced thus far has been a learning process towards the vision we have now of Project Permissionless (PP). At a high level, this is what Pendle is going to look like in the near future:

In aggregate, this means that anyone can create a new pool with any asset and provide liquidity without the worry of IL.

We’ve greatly enhanced value accrual to LPs, ensuring they collect both OT and YT fees with their single pool of liquidity. We’ve also designed it such that arbitrageurs do not capture value on the OT+YT = underlying asset mechanism. This means that no value is leaked, ensuring the LP benefits the maximum from trading volumes.

The new design also allows traders to trade with their preferred base token, whether it be a stablecoin, ETH, AVAX, etc.

Why PP?

With this set of great features, why are we calling it “Project Permissionless”?

We believe that permissionless-ness is the hardest but most important component in creating a yield layer.

Pendle currently relies on the team to analyze and create forges to support each new type of asset. While it is not gated, the complexity involved means the team is the de-facto decision-maker on which asset can or cannot be traded, a position which we are not satisfied with.

One of the benefits stemming from the range of yield-bearing assets we’ve worked on so far is that we now have a simple, standardized manner to tokenize yield, regardless of the asset.

PP Potential?

  1. Superfluid liquidity, unlocking trapped and stagnant liquidity. This is in line and building on FeiRari’s 4626 ethos (More details at a later date)
  2. Developers can leverage on our framework to create or build on top of yield tokens, freely creating a greater ecosystem
  3. Our ability to scale is passed to the community. Pendle becomes the Uniswap of Yield and the Pendle team is not the limiter on growth (We’ve seen what happens when you give the keys away)

We will have subsequent releases detailing the mechanics behind how we enable each of the features talked about above as well as how PENDLE will benefit as the rocket fuel to it all.

For now, we hope that this will provide a deeper look into the promise of Pendle and the growth we hope to contribute to DeFi with our PP.



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