PT / YT / LP Cheatsheet
Last updated
Last updated
Pendle lets you earn better yields. We help you secure better certainty and better returns (i.e. higher APY 🔥).
Earn fixed yield (with PT)
Provide liquidity (LP) to earn extra yield with minimal or zero impermanent loss (IL)
Long yield (with YT)
Imagine Pendle being a marketplace where property owners can split and trade their principal (rights to the ownership of the property) and yield (rights to rental payments) separately. You can then sell or trade the yield portion even before maturity. This creates new ways to manage and even speculate on yield.
1 PT lets you redeem 1 unit of the original asset at maturity date.
PT is similar to in traditional finance.
1 YT lets you receive the yield of 1 unit of the original asset until the maturity date, claimable in real-time.
YT is similar to in traditional finance.
You can sell PT and YT anytime on Pendle market, with no lock or penalty, at market price. They are traded 24/7.
Perhaps the most important takeaway about PT & YT:
💡 PT Price + YT Price = Underlying Asset Price
TL;DR
Earn guaranteed amount of your chosen asset if you hold the position until the maturity date.
Yield source
Volatility
Low
Investment profile
Long term
Beginners friendly
Guaranteed
Both capital and return are guaranteed, if you hold until maturity
Underlying asset yield outlook
Bearish
Price changes
Price rises in the short term with…
time
Rising underlying asset price (and vice versa) Note that PT is always 1:1 redeemable to underlying asset at maturity date.
Valuation
Time to enter
If you believe the asset will generate less APY in the future,
If you want to hedge against falling yields,
If you feel satisfied enough with the advertised APY,
If you believe PT is too undervalued
Early exit
Anytime, there’s no lock or penalty. PT always has a market price in Pendle’s AMM.
Capital efficiency
Other comments
TL;DR
Increase your yield exposure (long yield). Either hold it until maturity, or buy low and sell high to turn a quick profit. You profit when either or both…
the price of YT rises,
the yield produced by the YT becomes bigger than your cost buying the YT
Yield source
Volatility
Higher
Investment profile
Short or Long term
Intermediate to Advanced investors
Guaranteed
N/A
Underlying asset yield outlook
Bullish
Price changes
Price rises with…
Rising underlying asset price
Rising yield/reward token asset price (if applicable to that asset) (and vice versa) Note that time works against YT — YT price gradually falls over time to zero at maturity.
Valuation
Time to enter
If you believe the asset will generate more APY in the future,
If you want to hedge against rising yield,
If you want to speculate on short-term rise of yield % or yield token prices
If you believe YT is too undervalued
Early exit
Anytime, there’s no lock or penalty. YT always has a market price in Pendle’s AMM.
Capital efficiency
TL;DR
Earn extra “free” yields on top of your otherwise idle yield-bearing assets. A Pendle pool is denominated in your selected underlying asset only (PT + SY) (SY = wrapped underlying asset). There’s also no impermanent-loss (IL) concern at maturity.
Yield source
Multiple avenues:
Native yields — asset’s underlying yield + PT’s fixed yield
Volatility
Low IL is minimal (pool consists of highly correlated tokens only) before maturity date. No IL at maturity date because PT in the pool will become 1:1 redeemable to underlying asset.
Investment profile
Short or Long term
Beginners friendly
Guaranteed
APY not guaranteed but capital is guaranteed if you hold until maturity
Underlying asset yield outlook
Slightly bearish, due to some presence of PT in the pool
Price changes
Short term price change behavior is similar to PT due to some presence of PT in the pool. Note that the PT in the pool is always 1:1 redeemable to underlying asset at maturity date.
Time to enter
Early exit
Anytime, there’s no lock or penalty. Your APY is also not affected if you exit early.
Comment
PT has , its value grows over time and becomes 1:1 redeemable to the original asset at maturity date. Your realised discount becomes your fixed yield.
Falling
PT is cheap when is much higher than the
No leverage by itself. However, there are that allow you to deposit PTs as collateral to borrow assets, or even loop-leveraging.
PT can be a viable alternative to spot, with similar risk exposure, and the benefit of downside cushion thanks to the fixed yield realized upon redemption. PT can also be a , you may profit in short-term if underlying yield goes down.
YT until maturity date, claimable in real time.
Rising
YT is cheap when is much lower than the
Since , you effectively get a leveraged yield exposure (typically 20x or more), with no actual borrowing involved. So there’s no liquidation or oracle error risks.
Swap fees 3. $PENDLE incentives (Optional) You can boost your APY by locking PENDLE for . vePENDLE holders can also boost their Liquidity Provision APY up to 2.5X.
Anytime. Timing or underlying yield outlook aren’t very important. When implied APY is low, it is more favorable to enter with the “” enabled, and vice versa.
Can be used to hedge against falling underlying yield due to some presence of PT in the pool. Learn more about using .