Rapid Insights: The Resurgence of Pendle Finance

DeFi products such as money-market lending, proof-of-stake consensus, and spot liquidity provisioning, among others, collectively comprise a multi-billion dollar per year industry. At a high level, Pendle aims to layer financial efficiencies on top of these markets by enabling users to trade future cash flows in an independent market. 

Holders of yield-bearing assets on Pendle can sell their rights to yield for a fixed period of time to lock in upfront returns, while buyers of these rights gain exposure rates in a more capital-efficient way. With sellers able to lock in sufficiently high yields, and buyers able to assume the yield exposure with a fraction of the collateralization requirements, structuring markets this way creates a powerful mechanism for efficient market discovery of DeFi-native yields.