Pendle Launches High-Yield Bitcoin Pools with Up to 45% Returns

Pendle Expands DeFi Offerings with High-Yield Bitcoin Pools

On Wednesday, the decentralized finance (DeFi) platform Pendle unveiled new pools that feature variable yields reaching as high as 45% on a bitcoin (BTC)-backed token, marking a significant enhancement to its product offerings. This innovative initiative allows users to enjoy fixed yields of an annualized 10%, providing a diversified investment strategy.

The newly launched pool invites users to deposit LBTC, a liquid-staking token that is issued by the restaking startup Lombard. This Pendle pool is developed in collaboration with the Ethereum layer-2 network known as Corn. Since its inception, the pool has garnered impressive traction, attracting over $13 million in user deposits, with a maturity date set for December 26.

CEO TN Lee shared insights with CoinDesk via Telegram, stating, “We’ve observed significant use cases with fixed yields for ETH, and our objective is to replicate that success with BTC.” He further emphasized that the upcoming weeks will be bustling for Pendle as they prepare to roll out additional pools and new launches.

Pendle’s innovative methodology involves segmenting investments within a DeFi protocol, like Compound or Aave, into two distinct components: the principal invested by the user and the expected yield generated from that investment, represented through token rewards. This division leads to the creation of two tokens: a principal token (PT) and a yield token (YT), which can be traded on the open market, thus facilitating the high yields associated with Pendle’s pools.

Users have the option to purchase YT using LBTC, which provides them with enhanced exposure to the underlying yield, as well as points accrued from both LBTC and Corn until the pool matures. At maturity, the YT will be valued at zero. Alternatively, if users choose to forgo rewards, they can opt to receive either a fixed yield or a floating yield, which consists of monetizable points and future tokens that will be airdropped to LBTC holders.

Lombard serves as a restaking service that converts wrapped bitcoin (WBTC) into a Lombard Bitcoin (LBTC) token, which can then be utilized in various DeFi applications to optimize yield capture. Meanwhile, Corn is another emerging startup that centers its operations around using bitcoin as the primary token for transaction fees.

Unwrapping the jargon: Liquid staking refers to a service that enables users to stake their cryptocurrency assets in exchange for a new token. Layer 2 solutions are specialized blockchains built on top of broader service blockchains, focusing on specific use cases. DeFi encompasses the use of automated smart contracts to deliver financial services, such as lending and borrowing, directly to users. A pool can be analogized to a digital locker designed to securely store assets while generating returns, akin to traditional bank accounts.

In the last 24 hours, Pendle’s PENDLE tokens have surged by 11%, according to data from CoinGecko. This growth outpaces the 2% increase observed in bitcoin, indicating a robust interest in Pendle’s new offerings.