On The Brink with Castle Island TN (Pendle) on Stable Yield (EP.623)
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May 12, 2025 In this engaging discussion, TN, the cofounder and CEO of Pendle, shares insights on the evolution of decentralized finance and the shift towards stable yield offerings. He delves into the mechanics of Pendle, explaining Principal and Yield Tokens, and their role in providing stable returns. The conversation touches on asset selection strategies, the importance of user trust in DeFi, and the emerging integration of tokenized equities. TN also highlights user preferences for fixed-rate structures and the competitive edge of DeFi over traditional finance.
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Early Yield Farming Experience
- TN shared how farming small amounts with Yam Finance ballooned from hundreds to thousands before crashing due to a bug.
- This early yield farming experience inspired him and his co-founders to build a fixed rate product.
Pendle's Yield Tokenization
- Pendle splits yield bearing assets into principal tokens (PT) and yield tokens (YT) to enable fixed-rate lending.
- PT and YT prices are inversely related and always sum to the underlying asset's value.
Stablecoin Yield Preference
- DeFi yields are evolving towards stablecoins and major assets like USDC for more stable, trustworthy returns.
- Interest in ETH-denominated yields has declined as users prefer predictable, USD-based yield.