TL;DR
- TVL Recovery Efforts: Pendle, a yield trading protocol, is addressing a 40% decline in its TVL. To reverse this trend, Pendle has launched new liquidity pools on the Arbitrum network.
- Pendle-Karak Collaboration: In addition to the pools, Pendle has partnered with Karak Network. Users can place Pendle’s Principal Tokens (PT) on Karak’s platform and earn Karak points (XP).
- Liquid Restaking Tokens (LRTs): Pendle’s LRTs consist of Principal Tokens (PTs) and Yield Tokens (YTs). YTs represent rewards from staked assets and can be traded independently.
Pendle, a yield trading protocol, is working to turn around a big 40% fall in its total value locked (TVL). The project wants to stop this decline by setting up new liquidity pools on the Arbitrum network. These pools are meant for people who hold UNI, LINK, ETH, WBTC, CRV, CVX, USDT, and USDC.
Paging all holders of $UNI, $LINK, $ETH, $WBTC, $CRV, $CVX, $USDT, $USDC… or any assets really
You can now zap in with any of your favourite assets into the @ether_fi King Karak / Super Symbiotic LRT pools on Pendle!
Super yield for super you – nothing less for the royalty of… pic.twitter.com/zJrmN3yzMV
— Pendle (@pendle_fi) July 15, 2024
Pendle has introduced new liquidity pools on the Arbitrum network to attract LPs and encourage their participation. By doing so, the protocol aims to attract LPs who hold the specified tokens. These pools provide an opportunity for LPs to contribute liquidity and earn rewards within the Pendle ecosystem.
Pendle-Karak Collaboration
Besides the fresh pools, Pendle has teamed up with Karak Network, a restaking protocol. This team-up lets users put Pendle’s Principal Tokens (PT) on Karak’s platform to earn Karak points (XP).
The incentive structure encourages users to participate actively and maximize their rewards. Pendle tweeted, “Earn additional rewards on top of Karak XP with your PT-weETH, PT-rsETH, and PT-ezETH.” The added layers of rewards are meant to draw in more liquidity, ultimately strengthening the entire ecosystem.
Recovery Efforts
Pendle CEO TN Lee emphasized the importance of collaboration with other protocols to recover from the TVL drop. “We’ve been talking to protocols, and some have provided higher multipliers,” Lee stated. As an example, EtherFi has given a 4x multiplier, while Pendle’s pools on Arbitrum also reward LPs with ARB tokens.
The TVL decline, which saw a drop from $6.2 billion to $3.7 billion, was triggered by the maturation of several large liquid restaking markets on June 27. Simultaneously, the protocol’s native PENDLE token experienced a 50% decline before partially recovering amid the ongoing crypto rally.
Liquid Restaking Tokens (LRTs)
Pendle’s core function centers on Liquid Restaking Tokens (LRTs). These LRTs are unique because they’re further divided into two components: Principal Tokens (PTs) and Yield Tokens (YTs).
Yield Tokens (YTs), the other half of Pendle’s LRT equation, shine as tradable tokens representing the rewards users accrue on their staked assets. This means YTs can be bought and sold independently, separate from the underlying staked tokens.
Interestingly, Pendle saw a surge in activity just before EigenLayer’s much-awaited token generation event (TGE), highlighting the potential for YTs to capture pre-launch excitement.
Users sought to maximize their EIGEN airdrop allocations. However, the maturity of these LRT pools, launched earlier this year, led to approximately $4 billion leaving the protocol.
Karak’s Support for EtherFi Assets
Crypto analyst and influencer 2Lambroz.eth sheds light on Karak’s support for EtherFi assets. Specifically, Karak accommodates two types of EtherFi assets: eETH(Karak) and weETHk.
The former refers to EtherFi’s LRT directly wrapped and deposited into Karak, while the latter represents a mix of different LRTs and LSTs deposited through EtherFi. Both asset types yield points from EtherFi, but weETHk offers users twice as many points from Karak, along with additional VEDA points.
Pendle’s strategic moves, including the new pools and collaboration with Karak Network, aim to boost liquidity and recover from the recent TVL decline. As the DeFi landscape evolves, Pendle continues to adapt and engage with other protocols to enhance its ecosystem.
