Pendle Finance, a decentralized finance (DeFi) platform that offers users yields in the form of tradable tokens, is jumping on the growing real-world assets (RWA) trend with a new product that derives gains from traditional sectors.
Pendle was released last November on Ethereum and has expanded to Arbitrum, BNB Chain and Optimism networks this year.
Developers told CoinDesk that Pendle will use MakerDAO’s Boosted Dai Savings (sDAI) and Flux Finance’s fUSDC stablecoin - both of which generate yields from traditional finance sectors - for the RWA product.
RWA tokenization revolves around establishing a virtual investment mechanism that is linked to tangible assets such as real estate, precious metals, artworks, and collectibles. RWA has been a growing sector in crypto For DeFi, this would mean on-chain access to traditional finance instruments such as the U.S. Treasury Bonds, and the chance to deploy these tokenized assets for use in decentralized application (dapps).
“Fixed Yield and RWA have some of the largest addressable markets that remain untapped in DeFi,” TN Lee, the co-founder and CEO of Pendle, shared in a message to CoinDesk. “I firmly believe these will play a key role in attracting huge, offchain institutional investors onchain.”
“Yes, RWA is already in DeFi, and now Pendle is able to offer a suite of tools that lets you properly hedge or manage these yields. Interest rate derivatives, swaps, fixed income…all these products that TradFi institutions love, they’re already here,” Lee added.
The product could help boost the total locked value (TVL) of Pendle, which stands at just under $120 million as of Thursday. At the time of writing, PENDLE token was up over 10% at 60 cents.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.