Pendle Finance is a tokenized yield-trading protocol primarily on Ethereum mainnet and Arbitrum. Pendle allows users to long or hedge the yield exposure on their yield-bearing assets by splitting the underlying asset into its principal (PT) and yield token (YT). On-chain yield-bearing assets include LP tokens, LSDs, LRTs, LRT liquidity pools on Uniswap, GLP, RWAs (real world assets), etc. Users can purchase the asset at a discount and earn a fixed yield to maturity, long the yield of an underlying asset, or employ a mix of these strategies.
This report looks at how Pendle is well-positioned to capitalize on ETH restaking and its potential to become a fundamental DeFi primitive.