LSDFi Dark Horse Pendle Finance Introduction: Overview of Equilibria and Penpie Protocols in the Ecosystem

In March this year, the DeFi protocol based on liquid staking derivatives (LSD), known as LSDFi, gained rapid popularity following the successful Ethereum Shanghai upgrade. By the end of June, the total value locked (TVL) even exceeded 400 million USD. Standout performers include Pendle Finance, along with its ecosystem projects Equilibria and Penpie, drawing attention from the DeFi community.

For more insights on LSDFi research reports, please refer to this link.

What is Pendle Finance?

Pendle Finance is a DeFi yield trading protocol deployed on the Ethereum and Arbitrum chains that offers DeFi users better financial control and increased revenue opportunities through yield tokenization and an Automated Market Maker (AMM) system.

Its main services include:

1. Discounted purchase of assets for low-risk fixed income: Pendle splits users' LSD assets, such as stETH and aUSDC, into Principal token (PT) and Yield token (YT). Users can purchase PT at a lower price and receive fixed income from owning the asset after a certain period.
2. Long and short yield rates: Users can predict and invest in the yield rate changes of LSD assets. Purchasing YT when expecting an increase in yield rates can result in higher returns.

The trading strategy involves buying and selling PT and YT at the right time to increase earnings or hedge risks. Pendle Finance provides users with more asset utilization methods and revenue opportunities through innovative asset splitting and trading models.

For more information on Pendle Finance's future plans, refer to this article.

Pendle Ecosystem | What is Equilibria?

Equilibria Finance is a protocol customized and optimized for Pendle Finance to help $PENDLE token holders and their Liquidity Providers (LPs) maximize fund utilization and revenue.

Equilibria utilizes the veToken/Boosted yield model adopted by Pendle Finance to provide LPs with higher liquidity and revenue through the tokenized version of vePENDLE called ePENDLE and offer additional staking rewards for $PENDLE holders.

Through Equilibria, users can enhance their earnings in Pendle Finance while enjoying more rewards and liquidity advantages.

Note: vePENDLE is a token in Pendle Finance that is a key component of its yield model, used to boost LP earnings and represent holders' governance and participation rights in the protocol.

Pendle Ecosystem | What is Penpie?

The Penpie protocol also utilizes the above yield model, allowing users to convert and stake $PENDLE to earn higher returns, governance rights, and provide continuous and enhanced additional income for holders.

Its features include:

1. Users can convert their $PENDLE to mPENDLE in Penpie to access the high liquidity version and stake to earn higher $PENDLE and revenue.
2. Users can lock the converted $PENDLE as vePENDLE to gain governance rights on Pendle Finance, enabling participation in the governance process and enhanced $PENDLE earnings.

Through the Penpie protocol, $PENDLE holders and Pendle Finance LPs can earn high returns while maintaining voting rights in Pendle Finance.