Degens get all the headlines, but the bull market is really undergirded by institutional investors who put big money into familiar scenarios and take advantage of crypto's volatility to get 5Xs on safe strategies.
To a money manager who only needs 10% APR to make people happy, a 50% APR is a huge win (10% * 5X = 50%). If you're putting in 7 or 8 digits, you don't need to take degenerate risk. You're pulling millions of dollars out of the market with a 30% APR.
Use this knowledge to your advantage. You can stay safe and pull big money as well, even if you're not sizing in institutional capital. My favorite strategy is to copytrade institutional defi as a baseline and use those yields to invest in degen stuff basically for free. When it comes to this strat, Pendle is still far and away the leader in helping you safely generate funding from yields.
Using Future Yield to Degen Now
Pendle's bread and butter is its ability to split a yield farm into its two component parts: the present value (PT) and the future yield (YT). You can immediately access the YT you'd usually have to wait on. The balance is that your PT only comes back to its full value at the end of the maturation period. There's no lock, so you can sell at any time, and in a bull market, you get a certain level of USD/IL protection that you don't get at other times. You may actually be able to sell your PT before maturation at a USD gain if the component tokens in your farm experience enough USD gains.
The game here is to make sure your PT matures fully before the bull market runs out of gas. I'd give us another 12 months from the date of this writing (Nov. 2024). With your baseline protected, you can take the YT and trade degenerately with it to your heart's content. For free.
Pendle as an Institution
When institutions want to get into crypto at a level below BTC or ETH spot, Pendle is where they go. Pendle continues to accrue TVL regardless of $PENDLE price action, and it currently stands at an impressive $4B. The protocol makes stars out of assets like eBTC.
The most important ingredient to Pendle's ascension is its ability to mimic investment vehicles that are familiar to institutional investors. Big money ETH players love to hear terms like "fixed yield lock ins" and "stables/blue chip farming" with just a dash of "recursive borrowing" for spice. It also doesn't hurt that Pendle is one of the few platforms providing real yield that comes directly from platform fees. That baseline is what will make the upcoming Dec. 31 airdrop all the more juicy.
Dec. 31
I fully expect $PENDLE to explode in the days before the Dec. 31 Boros airdrop. Pendle is playing the HODL game perfectly, enticing big money players to buy and max lock $PENDLE for vePendle on Dec. 31 as the only way to receive this airdrop. So far, and this could get bigger, the airdrop includes $4.5M worth of $sENA, $ETHFI, $EIGEN, $REZ, $PUFFER and $COOK. If we continue this bull market into Xmas season, undoubtedly Pendle will feel rich just like everybody else and inclined to give away even more.
With Pendle leading the way on Ethereum and now Base, Tether pushing $16B of itself into the market, and defi not having its day in the sun yet, I think institutional defi is well positioned for a serious run leading up into Q1 2025. Now is the time to get positioned, because when it pops, there won't be time to play catch up with the tens of billions that will enter the space. We'll talk alts after that. $PENDLE's not an alt any more.
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