Tokenization, AMM, and governance are all part of Pendle’s system.

Everything you need to know about PENDLE in 2022, Pendle’s yield tokenization is an important aspect. Because of this component, owners of yield-producing assets can give up their right to return for a particular period. Tokens can also be put into a smart contract as a result of this. Ownership Token (OT) and Future-Yield Token (FYT) are then issued (XYT).

Pendle allows you to mint OT and XYT tokens if you own yield-generating assets, like stocks and bonds. Ownership of the underlying aToken is represented by the OT, while the underlying aToken’s future yield is represented by the XYT.

Trading and Minting, Know about Pendle:

There are two ways to take advantage of the XYT:

It is possible to deposit XYTs into Pendle’s AMM to increase liquidity. As a result, the banks and other financial institutions paid liquidity providers fees and other incentives.

In order to “set the interest rates and lock in their returns immediately,” consumers can sell their XYT for cash upfront.

The XYTs can be purchased directly by traders without locking up the underlying asset, allowing them to acquire exposure to future yield while using less capital.

XYT can be traded on Uniswap-type AMMs currently in use. Use Pendle AMM if the token has a time value.

Redeeming underlying assets

Only wallets containing the OT and the accompanying XYT token can redeem the underlying aToken from Pendle. XYTs have an expiration date, and once they do, they have no value. An OT holder, on the other hand, has the option of redeeming the underlying asset or rolling their investment into a new XYT.

The mint function

The mint function serves as the primary point of entry for Pendle. This feature enables the tokenization of yield-bearing assets. In addition to selecting an asset and an expiration date, users are able to mint OT and XYT. It’s important to note that XYT is a future yield, not the underlying asset’s ownership time value in OT.

Swapping

Using the Pendle’s AMM, the “Swap” option allows you to get the most out of your yield and capital. XYT and baseTokens can be swapped using this capability. Users can lock in the present yield and receive cash up front by trading XYT for a base token. In contrast, those who swap base token for XYT have exposure to future yields without securing a capital-intensive asset.

Is Pendle a good investment in 2022?

The current price of Pendle is 0.046067 USD as of Saturday, June 11, 2022. Our price prediction engine estimates Pendle will close at around 0.047328 USD tomorrow, based on the most recent price fluctuations. Based on historical trends, the Pendle price is predicted to be 0.41879 USD by the end of 2022. It may also be 0.46067 USD one year from now. It is possible that the Pendle price will rise to 2.69668 USD in the next three years and fall to 0.027769 USD. To put it another way, our calculations show that by 2023, the Pendle price should be approximately 0.74536 USD, and by 2024, it should be over 1.20599 USD.