Yield Trading Protocol Pendle Takes Steps to Reverse a Sharp 40% Decline in Its TVL

Pendle has introduced new pools on the Arbitrum network to attract liquidity providers (LPs).

Yield trading protocol Pendle is making moves to reverse a steep 40% decline in its total value locked (TVL).

After peaking at $6.2 billion on July 4, the protocol saw a sharp outflow of $3.7 billion following the maturation of several large liquid restaking markets on June 27. The outflow was also accompanied by a 50% drop in the protocol’s PENDLE token, which later recovered some losses.

Now, Pendle has introduced new pools on Arbitrum to attract liquidity providers (LPs), targeting holders of UNI, LINK, ETH, WBTC, CRV, CVX, USDT, and USDC. The project has also formed a partnership with the restaking protocol Karak Network.

The partnership will allow depositors to place Pendle’s Principal Tokens (PT) on Karak’s platform and earn Karak points (XP). “Earn additional ~ rewards on top of Karak XP with your PT-weETH, PT-rsETH and PT-ezETH,” Pendle tweeted.

On July 5, Pendle CEO TN Lee told The Defiant that Pendle is collaborating with various protocols to bounce back from the TVL drop. “We’ve been talking to protocols, and some have provided higher multipliers,” he said.

For instance, EtherFi has offered a 4x multiplier, and Pendle’s pools on Arbitrum will also incentivize LPs with ARB tokens.

To understand how Pendle fits into the liquid restaking landscape, a brief explanation is needed. On Pendle, Liquid Restaking Tokens (LRTs) are split into Principal Tokens (PTs) and Yield Tokens (YTs).

When users stake assets like ETH, they receive PT-ETH, which can be converted back to ETH when the staking period ends. YTs, on the other hand, represent the rewards earned from staked assets and can be traded separately.

Throughout the bull market, users have been able to stake their ETH twice — once on a liquid staking protocol like Lido or Rocket Pool to receive stETH or rETH, and again on Pendle to receive PT-stETH or PT-rETH.

This double-dipping strategy has been highly profitable, especially with the massive涨幅staked ETH derivatives throughout 2023. For example, users who deposited stETH into Pendle at the beginning of the year would have received an additional 2.5x return in PENDLE tokens.

However, the maturity of several large LRT markets earlier this year has led to a slowdown in activity on Pendle.

According to crypto analyst and influencer 2Lambroz.eth, there are two main EtherFi assets that are supported by Karak: eETH(Karak) and weETHk.

eETH(Karak) refers to EtherFi’s LRT that has been wrapped and deposited directly into Karak.

weETHk, on the other hand, represents a mix of different LRTs and LSTs that are deposited into Karak through EtherFi. Both yield the same points from EtherFi, but weETHk offers users twice as many points from Karak and additional VEDA points.

The above is the detailed content of Yield Trading Protocol Pendle Takes Steps to Reverse a Sharp 40% Decline in Its TVL. For more information, please follow other related articles on the PHP Chinese website!