Pendle price

Reduced my exposure this week because... I made enough this cycle. And honestly, farming is way more fun than just waiting for tokens to pump: >Looping on money markets > DN with Pendle and perps > LM on new ecosystems (hello Plasma) > Airdrop farming > DN on prediction markets & sportsbooks Man, I love that.

Some freeform thoughts about Pendle after playing around with it for a while, especially if you’re a humble mercenary stablecoin farmer: 1) If PT tokens are zero-coupon bonds, they also come with the downsides that aren’t immediately clear in the docs—since they make it look like it’s a sure-win thing. 2) Zero-coupon bonds have very high duration. In bond terms, this is basically the sensitivity of the PT token price to yield, not just the time to maturity. So, for a 1% change in yield, you can have even higher movement % in PT token prices. This means... 3) If you foresee liquidity issues in the future—say, you want to free up your PT tokens to do something else, like invest in something with a higher yield or take advantage of a meme coin opportunity—fluctuations in price can create challenges or even losses if you exit early. 4) I haven’t really thought deeply about the liquidation price of PT tokens, but I’d expect it to be somewhat similar? 5) After reading the docs on PT tokens, it made me think that if you use them against a broader yield portfolio—especially if you have a target yield—the short-term maturities of PT tokens in Pendle actually create some headaches for asset-liability management. This is because each time the PT token matures and you roll over to the next PT token, there is a risk where you can't get that sweet APY anymore and therefore if you promise a particular yield or require a particular income by a certain date or time, it will create some risk. I’ve literally never seen any content on this, probably because most of the fixed-income folks aren’t really in the DeFi space—but, very soon, we’ll see some creative use cases in how these tokens are remixed. The lack of cash flows from PT tokens means they’re, again liquidity risks 6) When I was scrolling around Pendle’s market page, I realized there aren’t a lot of opportunities for YT stablecoins. There were only two (dUSD and gTUSDa). Again, if fees scale on trading and the shortcomings of PT imply traders shouldn’t be touching the position, this structurally lowers potential revenue—so you have to rely on YT. But since there aren’t a lot of YT opportunities, again, opportunities for Pendle to earn trading fees are lower. At least for me, I'm not too sure if it's better to have shorter maturity positions so that traders can smooth over the volatility in PT while earning yield. Of course, the reinvestment risk is there, but if there is an ample amount of coins, then at least from a portfolio perspective, it may not be that bad. 7) A side note: If the revenue comes from fees and TVL, then it’s really a function of having a use case to trade. So, usually, volatile tokens with volatile yield are best for these markets. However, this closes out a demographic—like me—where we’d want stablecoin yields with either lower price risk or lower reinvestment risk. Or maybe just the occasional YT swing trade. I think having more development in this area would be pretty cool. Currently now Pendle may be tempted to use raw volumes like TVL that increases the fee percentage. But that's only if there is ample liquidity. 8) I may be wrong, but the vibes I get from the docs are that if you’re really willing to hold to maturity, you should always opt to be an LP instead of using PT only. This is because you can squeeze in some trading fees while enjoying PT yield However, as mentioned above you will suffer impermanent loss if you’re a liquidity provider and exit before maturity. Pendle will tell you that it doesn’t matter because if you hold to maturity, you won’t suffer impermanent loss—the PT side of the liquidity you provided will become 1:1 with the other SY (basically the token you provided) half But if you remember anything I’ve said above, again, there’s a special class of traders who would want to exit a position early for whatever reason. Some of these thoughts may be completely wrong and I'm more than happy to learn from it. I think an area that I haven't read stuff on and think deeply about is how under the DeFi paradigm can the PT be used as collateral elsewhere to free up capital. But that's another story for another day. Happy weekend

$PENDLE is 5th by 7-day holder revenue Yet its mcap is still under $1B Boros has been launched recently and already achieved $100M daily volume I might have missed $ASTER, but I am not missing this one