- Pendle Finance is expanding and diversifying into Build N Build chains; a Web3 blockchain technology which enables decentralization.
- The DeFi platform aims to diversify its revenue streams and capture new users.
- This move will enable Pendle to establish the liquidity foundation for LSD in the ecosystems and support other LSD and LSDfi protocols to be built on top.
Ethereum and Arbitrum-based liquid staking derivatives (LSD) platform Pendle is expanding to the BNB Chain network as developers look to expand their revenue streams.
Pendle finance is a protocol that enables the trading of tokenized future yield on an AMM system.
Success in Liquid Staking
The LSD platform has had some success with its liquid staking; the locked value of tokens on Pendle has grown by about 300% according to data from Defi Llama; a multi-chain TVL stats dashboard where data connectors are contributed and maintained by the community.
Liquid staking is a means of locking up users’ tokens and contributing to the security of a proof-of-stake(PoS) blockchain network. Retail players can use their smaller crypto holdings by locking them in a liquid staking pool to earn passive income. By staking their token, token holders receive a receipt called liquid staking token (LST) to evidence ownership of their staked token. LST can be transferred, stored, traded and utilized in DeFi or supported dapps.
Liquid Staking Derivatives (LSDs) allow stakers to earn a yield without losing the liquidity of their staked assets. LSDs are issued as an IOU when you stake your ETH and are intended to maintain a 1:1 value.
What Solution is Pendle bringing to the LSD ecosystem through BNB Chain?
According to LSD platform developer, Rightside, Liquid staking’s potential seems untapped even though it is one of the fastest-growing decentralised finance (DeFi) sectors. Dan, a growth lead at Pendle wondered “Why hold Ether if you can hold yield-bearing Ether?”, adding that it is easy to exit from LSTs to native Ether which makes holding LSTs an exciting proposition.
The yields users should expect from Pendle are in the form of tradable digital tokens, with some strategies offering as much as 82% annualized yields on ether (ETH). According to Pendle, “As long as you hold to maturity, LP-ing on Pendle can be a viable way to stack yields up to 162% boosted APY with zero impermanent loss” .
The DeFi protocol which lets users trade yield on staked Ether further added that when you provide liquidity on their platform, you get to hedge and diversify your yield exposure and there will be zero impermanent loss (IL). IL happens when there is a change in the price of users’ deposited assets.
Pendle holds the tenth-largest TVL on Arbitrum and is the biggest RocketPool ether (rETH) holder and the third-largest wrapped staked ether (wstETH) on the network while Lido is the biggest Ethereum liquid staking provider with $11.52 billion worth of Ether staked through the protocol.
In April of this year, Etherium’s long-awaited Shapella upgrade was completed, allowing users to unlock Ether deposited into the blockchain’s staking contract for the first time since December 2020. Before the upgrade, many potential stakers were worried that they would never be able to withdraw their Ether after staking it. This upgrade has made holding liquid staking tokens a “no-brainer”. DLNews noted that users flocking to Ether liquid staking tokens pushed deposits to the protocols that issued them past $20 billion.
Diversification
Pendle is taking opportunities presented by Liquid Staking a notch higher by expanding to BNB Networks to not only increase and diversify their revenue streams but also provide a platform for other developers to build additional solutions.
Build N Build (BNB) chain is a distributed blockchain network upon which developers and innovators can build decentralised applications (DApps) as part of the move to Web3.
According to Pendle developer Rightside, Pendle aims to establish the liquidity foundation for LSD in these ecosystems, so that other LSD and LSDfi protocols can be built on top.
