DeFi
DeFi Pendle Protocol Hits All-Time High as Total Value Locked Surpasses $5.78 Billion
Pendle smart contracts are among the largest holders of Ethena’s USDe synthetic dollar, as well as several liquid takeover tokens such as wrapped eETH and ezETH.
Pendle’s total value locked, denominated in ETH, is near its all-time high, at over 1.5 million ETH at press time.
(Pendulum)
Posted May 22, 2024 at 1:58 PM EST.
Decentralized finance platform Pendle hit a record high in US dollar-denominated total value locked (TVL) on Wednesday, a sign of substantial growth for the nearly three-year-old protocol known for its token standard for yield generation mechanisms. .
According to the blockchain analysis company ChallengeLlama, crypto users have locked over $5.78 billion worth of crypto assets into the protocol at press time. That’s a 40% increase from $4.08 billion in early May and a 2,350% jump since the start of 2024, when the figure stood at $233.67 million.
Pendle’s TVL hit its all-time high in dollar terms, in part because ETH surged nearly 26% over the past week. ETH is now trading around $3,740 due to increased optimism over the U.S. Securities and Exchange Commission’s potential approval of ether spot exchange-traded funds (ETFs).
The ETH-denominated DeFi protocol TVL, while not at its peak, is approaching its all-time high of 1.6 million ETH, first reached on April 25. At press time, Pendle’s TVL in ETH stands at over 1.55 million ETH.
Pendle Finance creates a yield marketplace for crypto users by separating yield-producing cryptocurrencies into principal and yield tokens. Users can earn a fixed yield, earn a long yield by purchasing more yield tokens, and provide liquidity to the platform.
Learn more: Analysts raise Spot Ether ETF’s chances to 75% as Prometheum launches product that treats ETH as a security
“Pendle has become an attractive place for speculators to deposit and mine their ETH and other assets for outsized returns in terms of yield or points,” wrote Edward Wilson, the intelligence firm’s social media manager in Nansen chain, in a Telegram message to Unchained. The protocol’s TVL shows that “demand for Pendle products remains very high.”
A popular parking spot for cryptoassets
In addition to ETH price appreciation, Pendle’s success in locked value largely comes from users depositing a number of different crypto assets into the DeFi protocol in an effort to obtain a return.
Pendle’s eETH smart contract holds the most wrapped eETH of all smart contracts containing wrapped eETH, the flagship of the native Ethereum liquid replenishment protocol EtherFi. According to Nansen, Pendle’s eETH smart contract contains 365,503 wrapped eETH tokens, worth approximately $1.4 billion, representing approximately 31.94% of the total wrapped eETH supply.
A different Pendle smart contract is also the third largest holder of Renzo’s ezETH liquid staking protocol, with over 162,504 tokens worth approximately $594.9 million, behind smart contracts for Zircuit’s liquid staking token pool and Renzo’s safe, according to Nansen.
And another Pendle smart contract is the third largest holder of Ethena’s USDe synthetic dollar, with over $369 million held. This represents approximately 14.48% of the total USDe supply, according to Nansen data.
Learn more: $327M worth of ETH sent to crypto exchanges after speculation over one-time ETF approval
Each of these tokens – eETH, ezETH and USDe – if deposited into Pendle will earn the depositor double-digit returns, according to ChallengeLlama. Pendle holding large amounts of liquid takeover tokens highlights how his “TVL has grown to where it is now thanks to the meta points popularized by EigenLayer, allowing users various options depending on their risk appetite,” wrote Pendle developer RightSide in a Telegram message to Unchained. .
EtherFi and Renzo, both collaborating with EigenLayer, not only implemented a points program but also made airdrop allocations for early adopters.
“Pendle remains one of the ways to offer some of the highest yields for $ETH and stablecoins ($USDe)… attracting capital from diverse DeFi users, whether retailers, DeFi builders such as silo or institutional actors,” RightSide added.
PENDLE price fell 5.8% in the last 24 hours, but rose 37.6% in the last seven days to trade at $6.00, according to CoinGecko.