Comprehensive Analysis of Pendle Yield Strategies: The New Normalization of Pulse's AgentFi

A detailed analysis of Pendle's strategy applications in different market cycles (bull run, bear market, sideways market), including buying PT to lock in fixed income, YT speculation, inter-period arbitrage, and stablecoin pool allocation, comparing the differences between stETH, uniBTC, and stablecoin pools in the coin-based strategy. This article is authored by 0xjacobzhao. (Background: Understanding Pendle and Boros: Turning funding rates into DeFi derivations) (Background Supplement: Pendle is difficult to understand, but not understanding it is your loss) Undoubtedly, Pendle is one of the most successful DeFi protocols in this crypto cycle. As many protocols stagnate due to liquidity depletion and narrative retreat, Pendle, with its unique yield splitting and trading mechanism, has successfully become a "price discovery venue" for yield-bearing assets, establishing its unique positioning as the "DeFi yield infrastructure" through deep integration with stablecoins, LST/LRT, and other yield assets. In the research report "The Intelligent Evolution of DeFi: The Evolution Path from Automation to AgentFi", we systematically outlined and compared the three stages of intelligent development in DeFi: Automation tools, Intent-Centric Copilot, and AgentFi (on-chain intelligence). Aside from lending and liquidity mining, which are the two most valuable and easily implementable scenarios, Pendle's PT/YT yield rights trading is seen as a highly prioritized application that aligns perfectly with our high-level concept of AgentFi. With its unique "yield splitting + expiration mechanism + yield rights trading" structure, Pendle provides a natural strategy orchestration space for intelligent entities, enriching the possibilities for automated execution and yield optimization. 1. Basic Principles of Pendle Pendle is the first protocol in the DeFi space focused on yield splitting and trading. Its core innovation lies in tokenizing and separating future yield streams of on-chain yield-bearing assets (such as LST, stablecoin deposits, lending positions, etc.), allowing users to flexibly lock in fixed income, amplify yield expectations, or engage in speculative arbitrage in the market. In short, Pendle constructs a secondary market for the "yield curve" of crypto assets, enabling DeFi users to trade not only "principal" but also "yield". This mechanism is highly similar to zero-coupon bonds + coupon splitting in traditional finance, enhancing the pricing accuracy and trading flexibility of DeFi assets. Pendle's yield splitting mechanism splits a yield-bearing base asset (Yield-Bearing Asset, YBA) into two tradable tokens: PT (Principal Token, similar to zero-coupon bonds): represents the principal value that can be redeemed at expiration, but no longer enjoys yield. YT (Yield Token, similar to coupon rights): represents all yields generated by the asset before expiration, but will drop to zero after expiration. For example, after depositing 1 ETH stETH, it will be split into PT-stETH (redeemable for 1 ETH at expiration, principal locked) and YT-stETH (receiving all staking yields before expiration). Pendle is not just a simple token split; it also provides a liquidity market for PT and YT through a specially designed AMM (Automated Market Maker), equivalent to a secondary liquidity pool in the bond market. Users can buy or sell PT or YT at any time to flexibly adjust their yield risk positions; among them, the price of PT is usually below 1, reflecting its "discounted principal value," while the price of YT depends on the market's expectations of future yields. More importantly, Pendle's AMM is optimized for assets with expiration dates, allowing different maturities of PT/YT to form a yield curve in the market, highly similar to the bond market in traditional finance. It should be noted that in Pendle's stablecoin assets, PT (principal token, fixed income position) is equivalent to an on-chain bond, locking in a fixed interest rate through a discounted purchase, and can be redeemed for stablecoins at a 1:1 ratio at expiration, providing stable returns and lower risks, suitable for conservative investors seeking certainty in returns; while the Stablecoin Pool (liquidity mining position) is essentially AMM market-making, with LP returns coming from fees and incentives, APY fluctuating greatly, and accompanied by impermanent loss risks, more suitable for active investors who can tolerate fluctuations and seek higher returns. In a market with active trading and generous incentives, Pool returns may significantly exceed PT fixed income; while in a quiet market with insufficient incentives, Pool returns often fall below PT, and may even incur losses due to impermanent loss. Pendle's PT/YT trading strategies mainly cover four major paths: fixed income, yield speculation, inter-period arbitrage, and leveraged yield, meeting the investment needs of different risk appetites. Users can lock in fixed income by buying PT and holding until expiration, equivalent to obtaining a fixed interest rate. They can also choose to buy YT, betting on rising yields or increased volatility, thus engaging in yield speculation. At the same time, investors can leverage the price differences of different maturity PT/YT for inter-period arbitrage, or use PT and YT as collateral to stack lending agreements to amplify yield positions. Boros's funding rate trading mechanism Beyond Pendle V2's yield splitting, the Boros module further capitalizes on funding rate assets, making them not just passive costs of perpetual contract positions, but tools that can be independently priced and traded. Through Boros, investors can engage in directional speculation, risk hedging, or arbitrage opportunities, effectively introducing traditional interest rate derivatives (IRS, basis trading) into DeFi, providing new tools for institutional-grade capital management and robust yield strategies. In addition to PT/YT trading and AMM pools, as well as the Boros funding rate trading mechanism, Pendle V2 also offers several extension suite features, which, although not the focus of this article, still constitute important supplements to the protocol ecosystem: vePENDLE: a governance and incentive model based on a vote-escrow mechanism, allowing users to obtain vePENDLE by locking up PENDLE, thereby participating in governance voting and enhancing yield distribution weight, forming the core of long-term incentives and governance for the protocol. PendleSwap: a one-stop asset exchange entry, helping users efficiently switch between PT/YT and native assets, enhancing the convenience of capital use and the composability of the protocol, essentially a DEX aggregator rather than an independent innovation. Points Market: allows users to trade various project points (Points) in the secondary market in advance, providing liquidity for airdrop capture and points arbitrage, leaning more towards speculative and topical scenarios rather than core value...