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PENDLE Reaches All-Time High Above $4 – Can It Break Into the Top 100?

Last Updated March 25, 2024 2:47 PM
Valdrin Tahiri
Last Updated March 25, 2024 2:47 PM

Key Takeaways

  • PENDLE’s significant surge led to a new all-time high price of $4.17 today.
  • Pendle is the protocol with the second biggest TVL in Arbitrum, following GMX.
  • Currently ranked at #105, can PENDLE enter the top 100 cryptocurrencies?

Pendle is a protocol that has pioneered the ability to tokenize and trade yields. While still not well recognized, interest in the protocol has skyrocketed in 2024, leading to new all-time highs in various activity metrics.

The PENDLE price also reached a new all-time high today despite a cryptocurrency market correction. This can put it in the spotlight, making Pendle a household name in decentralized finance and cause it to enter the 100 biggest cryptocurrencies.

How Does Pendle Work?

Pendle is a protocol that allows users to trade and tokenize future yield. It introduces a novel time-decaying Automated Market Maker (AMM) to optimize returns and ensure that users are not damaged by mispriced assets.

Pendle’s mechanism splits  the principal and yield through different tokens, giving users more control in managing their yield. Pendle aims to give users exposure to future yield while foregoing yield farming risks and volatility.

When a user deposits an asset, Pendle mints a Principal Token (PT) and a Yield Token (YT) . For example, if a user holds $100 USDC with an APY of 5%, Pendle allows them to split it  to a $100 USDC PT and a $5 USDC YT, which can then be sold in the open market.

Normally, the PT is sold at a discount the further away from maturity it is, while the YT can be sold at a premium if users believe the asset’s yield will increase, since YT holders can claim the accrued yield at any time.

If a user wants to redeem their principal, they can return their PT and YT, or wait until maturity if they have sold the YT. The protocol also offers notable APYs . Staking the principal token of ETH alone currently gives over 30% APY.  While the APY for YT is not fixed, it can possibly give significantly more rewards. 

PENDLE’s Role in the Protocol

Besides holding PT and YT, users can earn passive returns by accessing Pendle’s liquidity pools. To do that, they have to lock PENDLE and receive vePENDLE in return. VeTokens are a novel type of digital asset designed to empower token holders with voting rights in decentralized governance systems. These tokens introduce a time-based component to voting, adding a layer of commitment that enhances the decision-making process.

They represent tokens voluntarily locked by a holder for a specified duration, granting them the right to participate in a protocol’s governance. Typically non-transferable, veTokens often come with additional benefits alongside governance rights. They are designed to attract liquidity and align token holders with the protocol’s core mission.

PENDLE Supply Allocation
PENDLE Supply | Credit: DeFiLlama

From the circulating supply of over $155 million, 50 are currently locked as vePENDLE . Those holding vePENDLE can boost their yield and vote for which pools receive more yield incentives. The amount of vePENDLE a user receives depends on the amount of time the PENDLE is locked.

A user receives the same amount of vePENDLE if they lock for two years, half of that for one year and a quarter for six months. For example, a user locking 1000 PENDLE will receive 1000 vePENDLE if they lock for one year, 500 if they lock for 12 months and 250 if they lock for 6 months.

On-Chain Activity Reaches New Highs

The on-chain activity in the Pendle protocol has ramped up considerably since the start of 2024. At the start of the year, there was $300 in Total Value Locked (TVL), with over $188 million in Ethereum and $108 million in Arbitrum. Yesterday, that value was nearly 10 times higher at $2.90 billion, $2.28 in Ethereum and $602 million in Arbitrum.

Pendle Total Value Locked
Pendle TVL | Credit: DeFiLlama

Even though there are six more days left in March, Protocol revenue already reached a new all-time high  over $620,000. In contrast, there was just over $350,000 in revenues in February. The two biggest tokens staked are eETH , a liquid restaking token on EigenLayer and wETH , the wrapped, ERC-20 tradeable version of ETH.

These figures show a significant interest in the protocol. This is also seen in the PENDLE price, which reached a new all-time high of $4.19 today.

PENDLE Price Prediction: Will It Crack Top 100?

The daily time frame technical analysis shows the PENDLE price has completed a five-wave upward movement (black) starting from August 2023 to March 1, 2024. Afterward, it began a correction that ended on March 20. PENDLE has increased at a rapid rate since.

The increase started once PENDLE bounced at an ascending support trend line (green icon) existing since the start of the year.

The daily RSI supports the increase. The indicator is trending upward and broke out from its previous bearish divergence trend line (green), a sign of strengthening momentum.

PENDLE Price All-Time High
PENDLE/USDT Daily Chart | Credit: TradingView

The closest resistance area is at $4.58, nearly 13% above the current price. It is created by the 1.61 external Fib retracement of the drop. The next resistance is at $6.03, 48% above the current PENDLE price.

Measuring by its market capitalization, PENDLE is currently ranked #105, with a market capitalization of $967 million. KAVA is ranked #100 with a market capitalization of $1.01 billion.

With the circulating supply of 238 million, a $4.28 PENDLE price is needed to enter the top 100. If PENDLE reaches the first target, Pit will enter the top #100 cryptocurrencies ranked by their market capitalization.

Increased Interest Leads to PENDLE All-Time High

The Pendle protocol has garnered significant interest in 2024, as evidenced by its all-time high TVL and revenue fees. This also led to an increase in price, which led reached a new all-time high today and has nearly taken PENDLE inside the top 100 cryptocurrencies ranked by their market capitalization.

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