$PENDLE is the most undervalued low cap gem in DeFi (~$20mm mkt cap).

Pendle will introduce yield derivatives to the crypto economy as well as a novel AMM specialized for trading time decaying assets.

Behold a brand-new narrative and the next major evolution of DeFi.

Pendle will be the first protocol that will enable the trading of tokenized yields on Ethereum.

For users, Pendle will allow them to tokenize their yields and sell it for upfront cash.

For traders, Pendle will provide the most capital efficient way to speculate on yields.
Pendle enables holders of yield generating assets (e.g. lending deposits) to break out their deposits into an ownership token (OT) and a future-yield token (XYT).

OT represents a claim on the underlying asset.

XYT represents a claim on future yields up to a certain date.
Once a user has minted XYT from Pendle, they can use it for 2 things:

1) XYT can be sold via a futures contract for upfront cash

2) XYT tokens can be LP’ed on Pendle’s AMM to earn additional yield
Pendle’s AMM for time decaying assets (e.g. yield derivatives, futures, options) is a revolutionary new DeFi primitive.

Up until now it was impossible to trade time decaying assets on an AMM given that doing so would guarantee IL as those assets approach expiry.
Pendle’s AMM utilizes a shifting AMM curve to prevent IL .

As swaps happen, the AMM curve will shift at the equilibrium point to account for time-decay.

The rate of price reduction tends to accelerate over the duration of a contract period and stops at the expiry date.
Pendle’s native token $PENDLE is currently just a governance token.

However, according to the team, Pendle will likely implement a Curve-like gauge system for PENDLE soon, which would align the interests of token holders and LPs as well as provide direct value accrual to PENDLE.
Onto the investment case now.
The market opportunity is massive for Pendle.

In Tradfi, the yield derivatives market is as large as $524 trillion.

I cannot even fathom how large this market will be for DeFi at maturity.
If that is not enough, yield derivatives are just the surface level of Pendle’s potential.

Pendle's AMM will be capable of trading ANY time decaying asset on Ethereum in the future, which only further expands the TAM.
What this means is that Pendle will become the first decentralized trading venue for a wide range of derivatives products on Ethereum that do not currently have liquid secondary markets. 🤯
Pendle will be the best of breed platform for time decaying assets.

50%+ market share by end of year is achievable given their first mover advantage and continued leadership in innovation.

This is something that has played out before with $UNI, $MKR, $YFI.
Pendle’s investor roster features many of the leading DeFi funds in Asia like Mechanism, Spartan etc…

They also have very prominent angel investors backing the project not pictured in the graphic below.
Pendle will become a building block in DeFi, providing market infrastructure for a variety of assets.

Take a look at other market infrastructure / AMM protocols like $UNI, $CRV.

Is a protocol that is first to market with no competition in a massive category only worth $20mm?

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More from @HighCoinviction

27 Apr
$YFI's quarterly report and new dashboard showcase some impressive numbers and only further solidify what a sleeping giant @iearnfinance is.

I see $YFI market cap at easily over >6bn (4x from here) in the next few months and here is how I get there.


1) $YFI is able to grow yVault revenue month/month at below historical avg of 80% (likely conservative given $YFI constantly rolling new strategies)

2) Maintain $500k in treasury farming revenue and assume no growth in monthly revenue there

3) Trade at 40x Rev
Another interesting thing to point out is the fact how resilient TVL was despite massive correction in crypto over last week.

Perhaps users are a lot stickier than anticipated and this paves the way for exponential growth given $YFI has a base to continuously grow off of.
Read 4 tweets
16 Apr
Cosmos is home to a booming $100bn+ ecosystem that includes Binance, Terra, and THORChain.

Many overlook Cosmos due to misconceptions that value doesn't accrue to $ATOM.

However, upcoming upgrades change this story and $ATOM will be at the center of the Cosmos ecosystem.

First a quick overview of Cosmos.

Cosmos consists of various independent blockchains that follow a hub and spoke topology.

Hubs = Router of information for zones.

Zones = Application specific blockchains.

They communicate through an interoperability standard called IBC.
Cosmos provides a development kit (Cosmos SDK) for developers so that they can build application specific blockchains (zones).

Blockchains built with the Cosmos SDK have the ability to customize their chains to optimize for their use cases (ie Thorchain = cross-chain liquidity).
Read 15 tweets
27 Mar
$OHM has the highest potential of the non-pegged stablecoins to 5x within a month.

It trades at a significant discount to peers despite having a similar multi-billion $ TAM, intelligent token design, and backing from elite investors.

Behold the path to Mount Olympus.

👇 Image
Ethereum is dollarizing with traditional stablecoins accounting for ~60% of daily txns.

This reliance on the dollar is concerning and introduces regulatory risk that borders systemic.

$OHM aims to restore Ethereum's monetary independence and the potential TAM is easily>$50bn.
Just like how central banks manage their currencies using reserve assets (i.e USD, Gold, etc), Olympus DAO manages $OHM using reserve assets.

$OHM ultimately will stabilize against a basket of assets making up its treasury. Image
Read 15 tweets
3 Mar
Thought I would share some valuable investing knowledge I have accumulated from experience in Tradfi so we are all equipped to make $$$ this run.

1/ Image
1. Markets remain irrational for longer than you think, so don't be scared to press your winners (i.e. when people think we have topped, the real move is often yet to come).

The market as a whole can continue to get overvalued often for a long time and vice versa.
2. I'm seeing too many people place too much emphasis on certain ratios for DeFi projects such as P/E or FD/TVL.

What you need to consider is the full context — the film version as opposed to pictures.
Read 7 tweets
20 Feb
It's clear to me that we are headed to a multi-chain world.

At the center of this world is the demand to move value between blockchains.

$RUNE is not only the best way to express this thesis, it is the purest way of expressing it, which provides it a scarcity premium.

@thorchain_org is an independent blockchain built using the Cosmos SDK.

It is not only optimized for cross-chain liquidity, it also offers extremely strong value capture for $RUNE, which accrues value deterministically based on liquidity.

THORChain’s economic model is not fantasy.

It has been validated by @gauntletnetwork and has been tested in the wild for months on ChaosNet.

The value of $RUNE must always be worth 3x the value of external assets in THORChain’s liquidity pools.

Read 12 tweets

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