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Pendle Finance Could Be the Next Big Leap in DeFi’s Evolution


Since the beginning of the year, PENDLE has surged by 502% to new all-time highs.

This is indicative of its substantial growth amidst an increasing protocol activity.

What Is Driving PENDLE’s Growth?

Pendle Finance, an Ethereum-based yield trading protocol, employs a unique approach to yield farming by dividing assets into Principal Tokens and Yield Tokens. This framework enables users to trade tokens while earning yields as high as 47% on the underlying assets.

Despite its inception in 2021, Pendle has recently witnessed a surge in adoption. This uptick can be attributed to heightened Ethereum liquid restaking activity and airdrops from DeFi protocols like Ether.Fi.

Many users have been depositing their Ether.Fi restaking token, eETH, on Pendle Finance in anticipation of an upcoming airdrop from EigenLayer, another restaking protocol. This is because restakers receive points from EigenLayer.

Pendle TVL
Total Value of Assets Locked on Pendle. Source: Sentio

This marks a staggering increase of over 1,500% since the beginning of the year when Pendle’s TVL stood at a modest $233 million. The platform’s total trading volume has soared to $10.5 billion. Notably, most of these trading activities occur on Ethereum, but the project is gaining traction on Layer-2 networks like Arbitrum and Mantle.

Pendle’s exponential growth has cemented its position as the largest DeFi yield protocol. This remarkable rise prompted BitMEX’s co-founder Arthur Hayes to declare the platform as “the future of DeFi.”

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Conclusion

In conclusion, Pendle Finance has experienced significant growth in 2021, with a surge of 502% in value and increased protocol activity. The unique approach of dividing assets into Principal Tokens and Yield Tokens has attracted users seeking high yields of up to 47% on underlying assets. Pendle’s adoption has been driven by Ethereum liquid restaking activity and airdrops from DeFi protocols like Ether.Fi. This growth is reflected in the substantial increase in Pendle’s Total Value of Assets Locked (TVL) and trading volume. With endorsements from key figures in the industry, Pendle is establishing itself as a leading DeFi yield protocol, positioning it as a key player in the future of decentralized finance.

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