Pendle Launches V2 To Become The Uniswap Of Yield

The next iteration of Pendle’s yield-trading protocol has launched and is positioning itself to become a one-stop shop to trade yield. Users can expect new features to enhance their experience such as a new interface, permissionless listing of assets and a more capital efficient AMM. A new token utility will also be introduced called vePENDLE.  

Pendle is a DeFi yield-trading protocol that aims to bring the $6T fixed-income market to DeFi. The protocol enables this with two mechanisms: the first being yield tokenization which separates the asset into a Principal Token (similar to zero-coupon bonds) and a Yield Token (similar to the coupon payments). The second mechanism, yield trading, is then made possible. The Principal and Yield can be traded using a specialized AMM, providing users autonomy over their exposure to yield rates and opening up the possibility for yield to be used by others as a new building component.

The launch of vePENDLE in V2 will act as the governance token, enabling vePENDLE holders to dictate incentive flow to chosen pools, boost rewards and redistribute fees. Alongside this,  PendleV2 will enable the easy and permissionless integration of any yield asset onto the protocol using EIP-5115, proposed by the team, allowing anyone to create a yield market similar to that on Uniswap.

Pendle’s AMM goes hand in hand with this permissionless direction. By concentrating liquidity on a specific yield range, the new AMM can increase capital efficiency by up to 200 times while lowering the risk of loss for liquidity providers. Additionally, the AMM optimizes gas consumption while giving liquidity providers four revenue sources, which is advantageous for everyone who uses the AMM.

Since yield-trading can be burdensome to users without a background in finance, Pendle has  developed a simple user interface to take away the majority of the complications and for anyone to buy assets at a discount. Advanced strategies can still be utilized in pro mode such as fixed yield for low-risk stable returns, leveraged exposure to future yield streams without the need for collateral, or a combination of the mentioned strategies.

With V2 launched, Pendle will now focus on community building as top priority. Pendle has collaborated with numerous well-known DeFi protocols in the past and recently has received additional support from FRAX, Convex, Lido, Kyber Network and LooksRare. The Pendle team has demonstrated dedication in collaborating with other protocols to build robust communities to improve the DeFi ecosystem

Pendle has ambitious aspirations for the future. The team is evaluating joint ventures with a range of new protocols to extend its reach and discussions with fund and treasury managers to scale Pendle’s institutional use case and enter the trillion-dollar fixed bond market.