It's kinda criminal that it took me this long to understand how @pendle_fi actually works but now after studying it for @capmoney_, I finally understand why it's such a powerful primitive. All you need to do is frame it the right way and the mechanics just click. For me, the best way to think about Pendle tokens (PTs and YTs) is through the lens of yin and yang. - PTs are yin: they embody duration. Pendle PT tokens only exist for a fixed period, and when the market for them ends, PTs settle at “1.” Here, it's time itself that secures your yield: you lock in a fixed rate and guarantee yourself a return at maturity. - YTs are yang: they embody volatility. YTs only exist to generate maximum interest during their lifetime, and at maturity, they’re worth zero. They’re in constant flux, which makes them attractive for speculators who think they have an edge on APY. Now, let's take stcUSD as an example. Splitting it into PT and YT separates duration from volatility. - Hold PT-stcUSD: you redeem fully at maturity for stcUSD + interest. - Hold YT-stcUSD: you scoop up the yield PT holders passed on. If the implied APY of it rises, you can sell YT at a profit or just ride it until expiry. The same thing applies to PT-cUSD and YT-cUSD, except instead of yield, it’s Caps (points) you’re speculating on. Additionally, there are multipliers for holding YTs: 20x Caps for YT-cUSD and 5x for YT-stcUSD. If you’re looking for something fun to get nerdsniped by, then Pendle is def worth taking a look at. Once you wrap your head around PTs and YTs, it opens up a whole new way to think about yield and ultimately have more agency over how you receive it. Thanks for coming to my TED Talk.