Pendle (PENDLE)

The convergence of tradfi financial instruments (RWAs) and crypto are extremely interesting. We open the door to quite a lot of interesting experimentation, leverage, financialization of yield etc. that were actually impossible to do before. I think 2026 is going to be a big year for @pendle_fi

My Pendle - Lending Protocol Mental Model in a Nutshell This is why some in BWR were saying that lending protocols were interesting and I saw some pushback. I agree with both sides. Lending is appealing because of its proven PMF, optionality to charge fees, good TVL. But on the flipside, it's very competitive and it can give bad CAC and LTVs for many reasons. Weak value accrual. Not good So we move down the stack? What is bottlenecking these lending protocols? One idea is the asset supply, which then determines the appeal of the yield (in terms of risk and actual APY). There are many places that these assets can come from. This ranges from USDe, Ethena, Pendle, RWAs, etc. The more exclusive this asset and yield, the better, and the more likely you can charge fees. (Pendle is one of the many sources that transforms underlying yield assets, but I have a bag to pump) I think if you are looking into investing into this space, you either move up (see vault aggregators, automated vaults, Coinbase Earn etc etc) or down the stack (go to asset level). Lending protocols are ok but IMO the trade would materialize a bit slower because not only its affected by market cycles but also its porter 5 makes it tricky and that extra headwind is extra pain for no reason. But the bright side of this is that these lending protocols realize this, and things will definitely change and shake things up esp Morpho's Vault and markets v2 and aave hub-spoke are coming