🧐 Why do I like Pendle? Market Lesson 1: Profits are not earned through gambling, but through design! We have noticed that Pendle is currently rising against the trend, and on chain data monitoring suggests that there may be whales and institutions hoarding. Coincidentally, today I would like to talk about the topic of revenue—— I don't know if you have a feeling, but the current Crypto market is very similar to Wall Street after the Great Depression in 1929: Meme is a frenzy of speculators, various narratives are institutional rhetoric, and 99% of retail investors are still struggling with information asymmetry. When DeFi first emerged two years ago, many people, like me, were addicted to the "dig sell" cycle, chasing triple digit APY. It wasn't until a series of liquidations arrived that they realized the biggest tragedy for retail investors was always swimming naked in someone else's rules. So two questions were thrown out—— If those conceptual projects lacking substantial support collapse one after another, do we have a truly rooted agreement in the essence of finance that can retain profits? If profits can be cut, hedged, or even shorted, why entrust fate to the unpredictable APY? Management guru Peter Drucker once said, "Strategy is not about predicting the future, but about deciding what to do now to have the future The essence of returns should be the precise design and continuous iteration of investment logic. And @ pendle_fi is the first systematic design I have seen in this round that transforms uncertainty into a predictable return model, which is why I have always insisted on using Pendle for financial management. one ⃣ Pendle's philosophy of survival: True value is the control over the rate of return The underlying logic of Pendle is not complicated: it splits interest bearing assets (such as pledged ETH or stablecoins) into principal tokens (PT) and revenue tokens (YT). The former locks in fixed income, while the latter trades future cash flows. Compared to traditional finance, PT is like zero coupon bonds, while YT is an interest rate swap contract. Profit management is an eternal need for both individuals and institutions. In Pendle, there are three facts that we should most understand—— 1) In traditional markets, the scale of interest rate derivatives exceeds $500 trillion, while the penetration rate of DeFi's similar products is only 3%. This gap is precisely Pendle's growth space. 2) 90% of DeFi protocols cannot withstand bull and bear markets, and Pendle's TVL has grown by 400% against the trend in bear markets, indicating that this market is fundamentally afraid of volatility. 3) The entry of the quantitative fund Fasanara Digital into cooperation means that institutional funds are quietly laying out, which is not the end point, but the beginning of traditional capital voting with their feet. The most important point is that Pendle has awakened a profound understanding of the nature of finance in the market: true value is not the rate of return itself, but the control over the rate of return. two ⃣ Pendle may be the best 'asymmetric weapon' for retail investors In the crypto market, retail investors are always at the end of the information chain to blow foam together. Pendle chose a different path - not to make foam, but to put the reins on foam. When the LSD race crashes in 2024, users holding PT through Pendle are unharmed. This is a warning: The market volatility is unpredictable, and it is difficult for individuals to handle it with their own hands. You must learn to use "asymmetric weapons" to pull a thousand pounds with ease—— 1) When others are anxious about uncertain coin prices in liquidity mining, you can lock in the absolute safety of your principal through PT. No matter how the returns decline in a bear market, it will not affect the yield you have already locked in, which is equivalent to obtaining a free "downside insurance". 2) When the market panic sells, you can even mortgage PT to lend out assets and then buy the plummeting YT, betting on interest rate recovery. When FOMO sentiment returns to the market, you can sell YT in advance to cash in future returns. Using fixed income assets to leverage speculative gains - this is a game that only hedge funds can play in traditional finance. 3) Arbitrage can also occur during market downturns. At that time, the SOL fund rate on a certain exchange was as high as 0.3%. Pendle's Boros module allowed you to simultaneously long the SOL fund rate and short the ETH fund rate. After three days of testing, you earned a net profit of 47%, without fear of the market sideways. So, with Pendle as a weapon, retail investors have the right to freely "design profits", which is no longer gambling, but a precise probability game. three ⃣ Beware of Pendle's' cognitive trap ' Many people view market returns as a gamble: betting on trends, chasing hot topics, and anticipating explosive products, as if success is just a chance event in a probability game. However, the true market winners often overturn this perception—— When others chase after the rise and fall in the secondary market, smart people have already dealt a blow by reducing the interest rate dimension. Of course, Pendle is not perfect. As a real user, through personal experience, I must pour three bowls of cold water: 1) The learning curve is steep: Currently, in DeFi protocols, I think Pendle's mechanism complexity can rank among the top three, and understanding YT's pricing mechanism requires patience to read the "Interest Rate Swap Guide", which is extremely unfriendly to Bai; 2) Liquidity stratification: Popular assets (such as ETH) have excellent pool depth, but long tail assets may face sliding black holes. 3) High yield sustainability awaits long-term verification: Some high-yield pools rely on short-term market imbalances, which may lead to a decline in returns in the long run due to intensified competition or strategy failure. But it is precisely these 'flaws' that constitute Pendle's moat - it filters out speculators with complexity and settles long-term funds with real demand. four ⃣ Summary—— Returning to the initial question, why do I like Pendle? Why do I keep using Pendle? If you have also experienced the disillusionment and rebirth of DeFi, I believe you would agree with me—— 1) Investment needs to shift from "yield worship" to "risk management", PT is bulletproof vest, YT is sniper rifle; 2) Investment needs to focus on the "underlying flow of funds" rather than "token prices", and institutions never look at Pendle's candlestick when entering the market; 3) Investment ultimately needs to be considered from the perspective of interest rates, rather than simply the price of the currency. Perhaps in a few years, looking back, Pendle will be defined as the "starting point of DeFi 2.0": it does not create wealth illusions, but rather opens up the arsenal of financial engineering equally to every ordinary person. Only financial professionals who have experienced thousands of setbacks will realize that there is a survival gap between madness and rationality, and that is the first lesson that the market wants to teach us: true investment never requires big bets! The previous cryptocurrency circle was actually very foolish, and the interest rate market was simply difficult to achieve. Nowadays, the cryptocurrency circle is filled with actuaries who have insight into human nature. If you can understand and play with a Pendle, then you are already proficient in 90% of DeFi and derivatives. So, I suggest that every investment player should experience @ pendle_fi. Whether you are a risk enthusiast or an arbitrageur, doing an interest rate swap will definitely make you feel that Pendle is great, no need to say more! You can experience Pendle's Chinese community in advance, where there are many strategies for current financial management that can be learned and referenced. Many experts are generously sharing: https://t.me/PendleFinance_CN Finally, borrow a slogan from a group friend—— Are we trading in coins/points/airdrops/expectations/debt? None of them, what we're trading is a dream!