Pendle’s locked position value has shrunk by 40%! LRT derivatives expire + re-pledge craze subsides

On-chain interest derivatives market Pendle

In the past week, Pendle’s total value locked (TVL) has dropped significantly, from $6.18 billion on June 27 to $3.7 billion, a 40% drop. This is primarily due to the expiry of certain liquid pledged derivatives earlier this year.

The significant decrease in TVL is related to the expiration of LRT derivatives

Pendle’s significant decrease in TVL is closely related to the expiration of the liquid re-pledge market, including Ether.Fi’s eETH, Renzo’s ezETH, Puffer’s pufETH, and Kelp’s rsETH and Swell’s rswETH. These liquid re-hypothecation derivatives expired on June 27, which had a significant impact on the protocol’s locked position value.

Pendle Finance revenue tokenization platform

Pendle Finance introduces the concept of principal and interest separation bonds from traditional finance into Web3. Investors can purchase zero-coupon assets or income assets, which are called in Pendle Finance:

• Principal Generation Token (Principal Token, PT): Represents the underlying asset, which can be redeemed at a one-to-one ratio after maturity.
• Yield Token (YT): You can obtain the income generated by the underlying assets.

Liquid Restaking Tokens (LST) Bring Huge Yields to Pendle

In the first half of this year, Pendle saw a large inflow of assets from the Liquid Restaking Protocol, mainly due to investments in EigenLayer and others Anticipation of project airdrop.

Pendle’s Rollover function and its impact

Pendle launches the Rollover function to help users manage assets. However, the expiration of the liquid market and reduced interest in EigenLayer-related LRT resulted in a significant decline in TVL.

Pendle is still trying to reach new heights and attack Symbiotic

Facing the changing market, Pendle recently launched several new LRT markets through Mellow, focusing on another re-staking protocol, Symbiotic.

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