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A New Era for Stablecoin Yields (Pendle / Infinifi)
Recorded: June 26, 2025 Duration: 0:49:23Space Recording
Short Summary
Infinify launches a groundbreaking stablecoin protocol that amplifies yields through innovative tranche-based mechanisms, while Pendle continues to dominate the DeFi landscape with strategic partnerships and a growing array of stablecoin offerings. The conversation highlights the increasing trend of stablecoins in the market, innovative yield strategies, and the potential for significant user growth.
Full Transcription
Hey, hey.
All right.
Let me post this.
Good to see you guys all in here.
Let's see. Request it. Oh, four people requesting to speak. All right. Let me post this. Good to see you guys all in here. Let's see. Four people requesting to speak. All right. Here we go. Approve. Approve. Kirk. Definitely deny Kirk.
I'm kidding. Wilbert. Approve. All right. There we go. Let me... All right, we got it pulled up. We got Wilbert. Smooth thing and post it.
Remind everyone this is happening.
Yeah.
Let's see, where is the...
Nick, send me the link, please, sir.
The tweet.
How do I get the link?
Does the peek link There's the link.
Does the peek link also open the thing up?
Not sure.
Let's see.
It's been a while since I did that.
Let's see.
All right.
Cool.
All right.
All right.
Everyone, test your mics.
You guys can work and speak.
GM, GM, can you hear me?
I do not hear. Can you all hear not hear but that's probably on me
uh i can hear you rob twitter okay cool good okay microphone settings always work
uh space settings let's see what's going on here
hey wait here's something rob say something cool yeah there we go let me tell you about Let's go on here. Hey, wait. I hear something.
Rob, say something cool.
Yeah.
There we go.
Let me tell you about the late Roman Empire.
The late Roman Empire.
Perfect.
Fantastic. Interesting time.
Yes.
I know you can speak hours on the late Roman Empire.
Early Empire.
Early Empire is one of it.
Late Roman Empire, not very one of it.
Republic, also quite well.
No, early Republic, less one of it. All right. All right. And Wilbert, you're in here. Fantastic. late roman empire not very um republic also quite well so early republic last one all right all right
uh and wilbert you're in here fantastic uh so we have gm gm gm good to see you sir
all right looks like people are coming in so we'll give them maybe two more minutes and then we'll
we'll officially start.
Sounds like a good plan. Yeah, I should do some music.
I've seen people on Spaces do some really nice elevator music.
I gotta get my elevator music game up.
I know, I can never find the setting.
I can never find the setting to enable it.
I feel like it's a soundboard.
Spaces is not incredibly intuitive, but I will say it's much better now that we can finally use desktop instead of mobile.
Mobile for me is a hellscape.
I don't do anything for mobile.
I didn't even know they enabled it for desktop.
That is game-changing.
It was very annoying when you can only use your phone,
and your phone has a terrible microphone.
Yes, exactly.
Phone has a terrible microphone, and then you have to put on speaker phones.
You have to listen, and you're intrusive to everyone else
or hold the phone up to your face.
I mean, I guess you could use headphones.
I've done that before.
But I am not.
This is kind of doxing my own blood-iteness.
I am not an iPhone user, so I don't have those nice earbuds.
I have to go out and buy proprietary, like, secondary headphones.
That's all right. I mean, I sure they're they're killing your brain cells so you got to keep yours that's what
i've heard yeah i was talking to um maybe maybe i won't talk since i don't want to be embarrassed
by this but talking to another sort of like uh uh d5 folk person and he was saying that there's
this big movement to only use like wired headphones because all of the the radiation or like the um you know the whatever it may be from wireless things directly in your
head are not great actually you know you can go in your phone settings and see how far away from
your body the phone is supposed to be at all times which is not what anyone in the world does
to prevent like rfid exposure well but uh it's not even just the radiation it's the heat like
RFID exposure?
It's not even just the radiation, it's the heat.
Having your phone in your pocket all the time,
your phone gives off heat, and that actually cooks your boys,
for lack of a better term.
Well, I will say that having four kids, it has not cooked my boys enough.
Nothing can stop me.
You'll never know what their iqs might have been
that's true yeah yeah yeah no no the heat added to it they got they got nice and warm that's what
made them fast that was their warm-up there you go you know they were nice and limber this is true
but it does markedly reduce i think uh around your pocket, yeah, they did some studies.
And if you carry your phone around your pocket all day, it actually makes you, uh, it decreases
your, your count. Yeah. But everyone carries their phone around their pocket. I mean, when are they,
how are they going to compare like male fertility to female fertility? Cause they carry around
eight kids. I'm saying, you know, people used to have eight kids. That's true. Yeah. But there
are like, there are so many other things that that are okay. We're getting off topic here on stable coin yields
tranching and
Pendle. So I am actually super excited to dive into this. We will officially
start. Thank you guys for joining. We are joined by Rob who is a good friend of mine, someone I can nerd out with for
forever, whether it be about like the Roman Empire, about stable coin yields, about tranching, about financial products,
about decentralization. Just a good friend and also a good founder. He, along with Kirk,
and also Matt, I think he's in here, created Infinify. Infinify is a stable coin,
Infinify is a stable coin, tranche-based stable coin protocol that allows you to get a boosted exposure to the underlying yield of the assets,
while also getting even more boosted exposure using the junior tranche sort of duration risk assets.
And we're going to talk a lot about that. And then we're also joined by Wilbert. I think you guys probably know Wilbert from Pendle, one of the largest, if not the largest protocol in all of DeFi right now.
My wife is staring daggers at me. Yes?
Can you almost look through the couch at the time?
I can't.
Okay. So what is going on right now in the DeFi space? Well, Rob, I want you to, I've introduced Infinify, but I want to hear it from the horse's mouth. Can you tell us a little bit about what is Infinify? Finify is a way to structurally amplify yields by combining a maturity tranche and a fractional reserve element.
What we do is we take the liquid capital that our users deposit to IUSD and SIUSD,
and according to the distribution of exit periods that our lock depositors choose,
so how much of one week, how much of one week, how much of four week,
how much of eight week. We then deploy that capital out to various different duration assets.
So things like PTs, things like SUSDE, stuff like SERIP, for example. And those assets usually have
higher yields. So since we're putting more money into higher yielding assets,
we end up generating more money than we would
if we just put the liquid into stuff like Morpho and Aave purely.
We do put a portion of the liquid into stuff like Morpho and Aave,
but we put the majority of it into just buying more PTs, getting more SUSDE.
And since we do that, there's a higher total return,
which we can then distribute between our locked depositors
and our liquid depositors,
such that our liquid depositors are making a higher return
they would have had they just locked into the liquid stuff,
had they just deposited into Morpho.
And our locked depositors are making a higher return
than if they went directly into the PTs outside of Infinify. They also benefit from the fact that
they get auto rollover on their PTs now. And yeah, it's a set and forget experience for both
different types of users. Now, currently we're actually seeing,
so I was looking at the front end earlier today
and actually looking at it right now,
it's one of the tabs that keep open.
I'm seeing the senior tranche at 8.43% net APY.
Now, as a reminder, that is,
does that have any duration risk?
Is that like you can enter and exit?
How does that work?
You can enter and exit freely.
Now, I will say this does come with a trade-off.
Most of the time you can enter and exit freely.
You can just deposit USDC.
You want to get out, redeem your IUSD for USDC.
Off you go.
If everyone tries to redeem it once, then we do end up with, well, it's a fractional reserve system.
So you end up with, well, it's a fractional reserve system. So you end up with a
classical bank run. The good news, this is the same way that everyone tries to redeem their STETH
at once you end up with a bank run. Because, you know, you have the redemption queue in ETH.
Here you have redemption queue as well, if everyone is trying to leave once. And what that
means is that at that point, since this is still, you know, it's near C20,
you just go trade it on the secondary if you need liquidity immediately.
And people who want to, you know, buy it and are willing to wait a week or two to get out,
they'll come in and they'll buy at some level.
So they get an implied yield of whatever they're looking for.
I mean, so we do have a nice floor on how much that'll go down.
Just the same way that STE does.
So in this case, the senior tranche is redeemable.
So you have a super senior and a senior.
The senior tranche is SIUSD.
The super senior is IUSD.
You can unstate the senior into the super senior and then withdraw that into usdc is that one-to-one or is there like a big fee that gets taken out it's one-to-one
there's no deposit fee there's no that's that's fantastic and if there was a bank run as you said
then it could be the case that that uh iusd goes under peg on the open markets in which case you could buy it
and then wait for some of these pts to expire and then play that arbitrage game and redeem
one-to-one with usdc once there's liquidity available again exactly nice love it okay
fantastic i want to pull pendle in here so uh wilbur you guys have seen an explosion in stable coins period, right?
I think there's like 200 stable coins out there, probably more than that now.
Yep.
Uh, and you guys are directly positioned right in the middle of that.
So question to you, what is, what kind of stable coin narratives are you seeing sort
of pop up in the market sort of like in this quarter?
Yeah, I think broadly there's been a few categories
right you've got uh tbuild back stable coins you know the likes of uh open eden and we had usual
money as well um and you know we also have rwa back stable coins the ones that are working on
like private credit uh yeah i think recently we got a couple of those pools on pendle um you've obviously
you've got those basis back stable coins right guys like athena resolve uh recently also falcon
couple of pools on on pendle um and i think infinify belongs in a really interesting category
right uh where essentially you're getting diversified yield streams. And a large portion of that is, of course,
coming from Pendle PT yields.
And I think one of the biggest things that it solves
essentially is the need to roll over,
like Rob was mentioning earlier.
And that gives users a lot of convenience, right?
Instead of having to roll over from one PT maturity to another,
you basically get the convenience of just parking your funds
in there and receiving a diversified PT yield.
Okay.
Okay.
So, we've, yeah, I mean, there's a million things you can do in terms of composability.
I think composability is probably going to be the last half of this entire call because
it is, what I say often is composability is king.
It is not just that you can go and get a fixed
rate, fixed rate yield on all of these stable coins via the PTs. It is also the case that you
can then take those PTs onto your Morphos, your Oilers, and then leverage them up against a
variable rate, but soon maybe even being able to leverage it up against a fixed rate and then get
a fixed rate collateral, a fixed rate loan. But again, let's not do composability quite yet. We are, I think you guys have still been the beneficiary of points campaigns.
So a lot of these, like you said, T-bill yields, underlying yields that are roughly between five
and let's say 8%. I mean, granted the InfinitiFi locked IUSD has up to, I think, 14% native yield.
And we need to talk about that in a second.
But do you think that the points meta will survive until the next cycle?
Do you think it's here to stay or do you think it's a transitory thing?
Honestly, we haven't been seeing signs of fatigue.
Obviously, it's slowed down a little bit uh we came from like 20 30 implied rates i think you know the best even you know
on athena last season um oh yeah or two seasons ago 40 yeah you know we also had usual money out
there uh 20 30 but that was when you know market sentiment was in a better shape right
but even in this market i think it's it's really good because you're still seeing more than 10
implied rates uh infinify iusd for a period of time also and even now i think it's still close
to 10 so you know nowhere else in d5 can you get like 10 fixed rates that are essentially liquid
in the form of like PT tokens.
So yeah, I don't think it's going to be slowing down.
It's going to be ending anytime soon in terms of points meta.
And it's just the cherry on top of the cake, right?
You've got, well, in terms of points,
I think they're really essential
when it comes to yields that are fixed.
You know, let's say TBOs or like lending rates,
like, you know, what Syrup is doing,
institutional lending. But say, you know, what Syrup is doing, institutional lending.
But say if you have a yield source
that is perhaps more volatile,
like basis trading,
like Athena Resolve guys,
then you probably need,
you probably don't have to use
like a points program, right?
But if it's like fixed yields
or stable yields,
then having that points element
does help to juice up the interest on the YT speculation side of things.
So let's talk about that.
We've seen a lot of yields that are effectively just another new wrapper of a T-bill or another new wrapper of the basis trade.
And I like basis trade and T-bill wrap stables.
I do. Don't get me wrong and Teeble wrap stables. I do. Like,
don't get me wrong. They're fantastic. They scale. They're one of the things that sort of
really broke the YBS yield bearing stable narrative. But now we're seeing new mechanisms
that I'm very excited for, like the Infinify one. So let's bring back someone from the Infinify team,
could be any one of you, and talk about the tranching mechanism. You guys have a senior
tranch getting 8.43%, and you also have junior tranches getting up to, right now, 15%. So can
you explain how these junior tranches work? Absolutely. So the junior tranch, what they're doing is they are taking on both concentration risk, first loss risk, that is to say, where if any of the protocols that underlie Pendle were to have it default, anything were to go wrong, those guys would be the ones getting slashed.
And they're also taking on duration risk.
And if they are agreeing, hey, I'm willing to stay locked up for a week from when I asked for my money back, or I'm willing to stay locked up for eight weeks from when I asked my money back.
And that means they're giving us useful information, which we really appreciate because we need to know, hey, how much of our capital should we deploy to one week duration assets?
How much of our capital should we deploy to, you know, PTs that are currently at eight weeks or lower maturity?
How much of our capital should we deploy to PTs that are 13 weeks or lower maturity?
And the distribution that we get locked users, the junior charge users coming in, that gives us that information, allows us to automate the asset liability management side of things,
which is also known as laddering the portfolio. And so what we do is, since we're putting all that extra liquid capital into these higher yielding assets, we actually can pay these guys
at a rate that is above what the native PT is yielding. Since the liquid guys whose capital
is also in there, they're not getting as high as the
PT is yielding. They're getting close to, maybe sometimes even over some PTs. But typically
speaking, they're going to be getting either right at or slightly below that yield. And they're okay
with that. And the benefit for them is that they're effectively fully liquid. So they're getting
a little bit lower than the PT yield, like right now, 8% to 9%,
but it's a fully liquid position.
So instead of having this sort of like
zero coupon bond yield,
where you have to wait until expiry,
of course, like you can sell PTs.
They're getting this yield that's USDC in,
USDC out around 9%.
But you're saying that the locked,
a locked IUSD is a little bit different. Now, I'm used to locks where it's like you lock in for four weeks, after four weeks you
can unlock.
What you're saying is that, and correct me if I'm wrong, when you want to exit, then
you take on these weeks of lockup.
You take on these weeks of exiting time.
Exactly.
It's a little bit different of aup. You take on these weeks of like exiting time. Exactly. It was a, it's a little bit different of a mechanism.
What's happening is most of the time you're just in a normal ERC 20 position.
LIUSD eight week, LIUSD six week.
And those are fully composable as well.
Going to be some really interesting morpho leverage loops coming down the pipe with those junior tranches. But when you're ready to.
Not only that though, is there, and Wilbur, I want you to commit to this right now. I'm you're right at it... Well, not only that, though.
Is there...
And Wilbur, I want you to commit to this right now.
I'm kidding.
You don't have to.
But is there a chance we see some of these LIs on Pendle?
There is.
Yes, you could absolutely...
Yeah, we were just chatting with Rob, right?
Like, I think that's a good possibility
we could even have LiUSD
as long as there's deep enough liquidity pools.
But even without that secondary liquidity, it's possible to get them on Pendle.
But the users that are entering the market would need to understand that it's not as liquid as SIUSD.
So it's a trade-off there.
If you want higher yields, SIUSD probably is a better option.
But if you want higher liquidity, SIUSD probably is a better option. But if you want higher liquidity, SIUSD is probably the better option.
But if you want higher yields, you could go for LIUSD.
Exactly.
Because theoretically, you're not only benefiting from the 13% to 15% LIUSD yield, but you're also benefiting from any points on top of that.
Now, I guess I'll turn it back over to you.
Rob, can you explain the points campaign? Yeah. So I didn't finish explaining the lock.
Do you want me to jump into the finish explain? Oh, sorry. I got too excited. Go ahead with the
lock first. Real quick, the lock. When you're ready to exit, you say, hey, I want to leave.
And you burn your LIUSD token, and you're then placed in a VE lock that just ticks down from say eight weeks to zero weeks,
but you get yield all the way out. And for us, we thought that was a big improvement because,
well, some of these things where you have like a one week cool down, it was annoying not getting
yield during that one week cool down. You definitely are not going to get people to
commit to that for eight weeks. So we found that to be a good trade-off while still not requiring users to come
back and relock every week. Now with the points program, what we're doing is we're offering users
1x points on SIUSD, staked IUSD, and LIUSD, locked IUSD, per dollar. We're offering users 2x points on just naked IUSD, which is a very useful asset
to us because naked IUSD has a bit of a money multiplier effect, kind of like USDE increases
yield on SUSDE and level USD increases yield on S level USD. So people holding IUSD is a good thing for us. Increases our returns even higher.
Then with...
Yeah, it's the case that,
so like with the senior and junior tranching mechanism,
it is the case that whenever there are more people
in the senior tranch,
that always means more excess yield for the protocol,
which typically means more or boosted yield
for the junior tranch.
Is that a correct summation of how that works?
Super senior that has that multiplier effect.
But yes, more people in general-
Wouldn't the senior as well,
because the senior's take is lower than the junior's take?
Yeah.
Is lower than the total net?
It does.
We do actually have a,
the senior has that effect as well,
not as strongly reflexive as the super senior,
because the super senior gets no yield. Super senior on 100 of the use of everyone else the senior passes on probably a
small portion to be one percent to the rest of the protocol exactly and for that reason we have a very
odd dilution mechanism where right now if you deposit a bunch to si usd you are actually going
to be making a higher return than our front end says you will.
No, can you explain that to me like I'm five or is that a pretty complicated model?
Basically, since we're able to deploy more capital at that point into PTs, the total yields go up.
And because all of the yield goes up, that means there's more yield to distribute to the SIUSD and LIUSD users.
Anti-dilutionary, right up until we reach a certain level where locked is only 15% and then the trend flips and it begins to be dilutionary.
At least on that side.
We need more of that. We need more anti-dilutionary yields.
Whoever's building this, get in here.
It is extremely unconventional in that regard but do you want me to hop into the points uh the real real interesting thing
we're doing points on pendle like i love our other stuff yts we set up that multiplier to be
extremely aggressive i think you did some math on it it was i went out and bought ten thousand
dollars of yts myself after that write-up.
Hey, you should always have founders who bet on themselves.
Rule of thumb is if a founder is not betting on their own protocol, they don't believe in it.
I like the numbers.
I was pretty sure we got the numbers.
Yeah, and so did I.
Actually, full disclosure, this is the only YT that I'm in.
So this is why I'm kind of excited to host this space.
I did the numbers.
I did my own speculative math.
And I did also myself ape some of those YTs.
And I am typically very conservative with YTs.
I think the last YT that I bought, I almost bought the YTUSDS.
I thought that was a good one too.
This is financial advice, Stephen.
This is definitely financial advice.
Yeah, not financial advice.
But the mathematicians, like the people who are willing to do the math and diligence,
really benefit from the YTs because YTs are speculative.
They're really going long on some, typically on an airdrop campaign.
So you're like either going long or short with leverage exposure to some sort of campaign.
And that is, can be really good, but it can also be like a widowmaker
because it can go really well or it can go really poorly.
It can be really screwy with the points.
And I kind of, I don't like that.
I did not like the way that some of the Pendle stuff was handled in those early points campaigns.
We're just doing like levered YTs or, you know, they're YTs.
So whatever the implied leverage on the rest of the thing is, that's what you're getting.
And then all points convert equally.
There's not going to be any weird adjustments to Pendle,
which was something I saw that kind of pissed off.
It was a multiplier by being on Pendle,
but it's not like the proportion of the total tokens is going to be like
discretionarily different.
Exactly.
We're not doing that.
It's just equal treatment.
One point.
So is there anything you, yeah, exactly point so is there anything you yeah exactly right is
there anything you can say i i don't want to like uh i don't want to get you into any kerfuffle so
please feel free to say no is there anything you can say about like the the length of the campaign
or any of your sort of uh targets for the campaign as a percentage of FDB. Again, don't say anything you're not allowed to. So I can't say anything about,
you're not allowed to comment on existence of,
or okay, you're not allowed to comment
on conversion of points to anything at all.
That is unfortunately not kosher.
But I can tell you that the campaign
is going to last for six months.
So from, it started in June and it will
end six months from the first of June. And that's season one. That is exciting. Okay. So we have a
season one ending in six months. So then if you guys are out there speculating with your YTs,
and I mean, this is the exact sort of math I did. Maybe I'll, maybe I'll re quote that,
that post I did. If you're assuming six months and then you can sort of,
maybe there's an airdrop, maybe there's not, who knows, right?
We can't, we can't speculate on the conversion of points into tokens.
You can look at what a season one airdrop typically is and then estimate
some sort of FDV and then extrapolate a point value from there,
which is precisely what we did. Oh my God.
My wife just came in here with
a humongous spider that they killed. That is fantastic. Congratulations. That's amazing.
She came in looking so victorious. Oh man, I am so happy for that.
My wife had a three inch cockroach the other day. I know exactly what you're talking about.
So I know exactly what you're talking about.
That's a yes, exactly right.
Yeah.
Oh, man.
So happy.
Look, the real yield, right?
The real yield is in a happy family.
OK, so yeah, that's right.
So that's the kind of math that I would be doing,
because the point multipliers are very explicit.
So if the point multipliers are explicit and consistent,
then you can say, well, I think this much
is going to be in Pendle.
This much is going to be in SIUSD.
This much is going to be in IUSD.
This much is going to be in the LIUSD.
Then you can extrapolate how many points you think
there'll be by the end.
And that's the funny math that we were doing.
Also, shout out to the Pendle lads.
There's a really fun trading group that just talks about YT valuations, and that's been a lot of fun. So I'm actually going to circle back
to Wilbur and ask you about this. We've seen a ton, and I mean like an extraordinary amount of
demand for the PTs, just a ridiculous amount. I think like 30% of all of Morpho's TVL is PTs, which is insane, or at least Pendle attributed.
What about the YTs?
What kind of uptake and interest have you seen in the YTs from sort of larger adopters?
Yeah, I think YTs are still getting decent amount of traction.
And it's mainly the stablecoin pools on Pendle that are getting interest for the YTs.
Obviously, Infinify is one of them.
And I think there are a couple others that are also getting decent interest for the YTs. But yeah, I think compared to last year, during the restaking season, the YT apes have honestly gone down.
And the type of persona or traders that are buying YT nowadays, they actually do look at some kind of financial projections before aping into YT.
So YT investors actually do look at the math before entering a lot of these restaking protocols last year people realized that our uh yt is not free money unlike pts which are you know almost
guaranteed fixed rate uh apart from dpeg risk and some other risks but yt essentially could be
an investment that could give you multiples on your your initial capital or it could also be a
really bad investment decision, right?
Depending on what implied rate you enter the market at
and how long you hold YTs,
because yeah, with YTs, it's a decaying asset
for those of you that are not too familiar with that.
And you don't really have to hold YTs till maturity, right?
Let's say if implied rate comes,
you could actually just sell your YT before maturity.
Or if you want to be what we call a YT kamikaze, you could hold it all the way to the end of maturity.
In that case, you would simply be speculating on the interim yields as well as the airdrop value paying off the cost that you put into the YT.
I think that's exactly right. And actually, there are some, so I don't know if you guys know this, but we talk to a lot of like
whales and institutions and hedge funds and LPs, and they have some secrets for how they play the
YT game. So many of them will just go out with their like SY and they'll just mint. They'll
mint the PT and they'll mint the YT. And so right off the bat, they're getting a leverage exposure
to the points because Pendle always gets the best points multiplier. You guys have been fantastic
with like winning that game. And so right off the bat, you're effectively holding the base asset
while getting a points multiplier. Now you can do a number of things.
You can either just hold that until the end
and get a points multiplier on your held asset,
or you can take those PTs that you have,
that you're holding and leverage them.
I love that right side is going absolutely ham on the Reacts.
What you can do is you can then leverage the PTs on Morpho.
So now you're getting,
let's just say you're getting a 20% yield now on your PT side.
You're getting 100% of your yield exposure from your principal on the YT side,
boosted by the points multiplier.
So you're getting the best of both worlds.
And if you hold to expiry, you can redeem the YT and the PT one-to-one for the SY.
You've gotten all your points.
You're getting a leveraged stablecoin yield on your PT side.
Or if you're not cool with leverage, if you want to be more vanilla, just take the PTs and LP them.
Now you're getting all of the points of your YTs, of your principles, boosted by the multiplier.
And you're getting all of the points from the LP and any APR that LP is generating.
So that's what the big boys are doing.
That's what a lot of the whales, a lot of the institutions are really interested in
because they're not risking any capital
and they're getting the YT exposure.
How much of that have you seen
from sort of the LPs you work with?
Yeah, I think it's a popular strategy
and more people should honestly do this, right?
Like min both PT and YT in equal proportions
and put the PT into like money markets
like more for Aave to do looping strats.
And on that note, actually, Stephen, I'm not sure if you've seen this,
but we've recently launched LP collateral.
So basically now you can take your Pendle LP tokens, put it into silo finance.
We piloted with LP positions of the Athena markets on Pendle.
So essentially now LP, you can use it as collateral
while still earning points and yield, right?
So that's even crazier than using PTs as collateral
because with PTs, you don't earn any points.
You only earn yield.
But let's say if you want to earn both yield and points,
you could then use your LP as a collateral.
Obviously, it's not like guaranteed fixed rate
like what PP is doing,
but it's an interesting strategy
that I think more people will be exploring
in the weeks to come.
So, okay, let's talk about this
because I'm not going to point any elbows,
but we've seen other protocols try this before
and they were not as successful.
Now we have Silo entering this game.
How is Silo the game changer for this where other protocols
may have failed yeah honestly i think it's just matter of the symbiotic relationship with pendle
right because with like you said pendle yt and lps usually get some of the highest multipliers
like with infinify we're getting 4.5x right so if you take, let's say, the LP position or the YT position,
obviously, the YTs, you can't really use them as collateral.
Say if you take the LPs as a collateral and you put it into money markets,
and by the way, it doesn't even have to be siloed.
In the future, we'll be working with more money markets,
more for all other.
Stay tuned is what I would say.
And you could use those LP tokens as collateral.
Yeah, so it's like yield farming and points farming on steroids, right?
Now you're not just looping the yield component,
but you're also looping the points component, right?
So if you're familiar with the YT game,
people usually buy YT if they want the highest leverage to points.
But now if you take the LP as a collateral and you loop that,
you're still getting comparable amount of leverage and exposure to points. But now if you take the LP as a collateral and you loop that, you're still getting comparable amount of leverage and exposure to points while increasing your underlying yield.
And not only that, but also having a, it's less speculation on the yield, but it is speculation
on the yield. So you're getting exposure to that boosted points yield, but also at the same time,
you're not risking all of your principal.
You're saying, I want the boost on the points, but I also want to sort of keep my stable coins.
So what you can do now is what you're saying is take the SYPT LP, get the leverage exposure to the points, and then leverage that up potentially even at a positive net loop.
leverage that up potentially even at a positive net loop.
So there is a reality in which you could be getting like a 5% to 10% LP yield,
leveraging against a 3% to 4% borrow cost of a stable coin.
And then, so you're having a positive net loop.
You're already in a positive yield scenario,
plus getting leveraged exposure to all of those already boosted points.
Exactly.
I love it. Yeah. I was just going to say.
This also leverages liquidity. Go ahead, Kirk. Kirk's jumping in here.
I was going to say I love this because for the longest time, there's been two sides of the
paradigm. Everybody's getting leverage except for the LPs. It just fills in a void, I think,
that's been missing for a while
where people can express themselves
in whatever kind of risk profile
that they might have, you know, on Pendle.
And we try to reach for that same paradigm
with Infinify with like the different products
we've created.
So it's going to be awesome to see.
Yeah, we've been incentivizing the LP from day zero.
Full emotional value, 4.5X.
It's going to be so cool to see.
I was just about to ask about that.
Yeah, go ahead.
So you guys have decided to incentivize the full notional value.
And this is something a lot of people don't think about.
So can you explain the difference between what it means to incentivize the full notional value
as opposed to only incentivizing the SY portion of the LP.
I know that's a lot of acronyms and letters and things for maybe the lay audience person,
but hopefully we have a very, very smart audience here that can understand what's going on.
All right. I'm going to try my best. Kirk, I'm going to need you on backup.
This math confused me so much when we were doing it the first time around.
As I understand it, basically with an LP, you've got two components. You have the
SY and the YT.
And obviously...
Well, with an LP, it's the SY and the PT.
Is it the SY and the PT? Thank you.
Yes, the SY and the PT. There is an option
to keep YT when you deposit. It's
also mildly confusing.
But,
so you end up with a position
that is not getting the points multiplier on the full value
of the position since you have the pt in there and pts normally don't get any points since they
are the result of splitting off the points that means that your lp is only going to be getting
half as many points under typical circumstances kind of like if i incentivize points onto a usdc
iusd pair and i do only the iusd, now you're getting only half the points you should.
And that's not a fair request.
You're taking out IL risk here with the PT position.
You're now holding that PT.
And if everyone tries to leave, you're not going to have a market to sell into since you're the LP.
So we need to take care of our LPs. And for that reason, we decided, all right,
rather than just giving you half the points that you'd normally be getting, we're going to go
ahead and give you the full amount of points that anybody else would be getting just from taking on
the YT. Though, of course, without the hyper levered exposure that the YT will get you,
the hyper levered exposure that the YT will get you, but with more of that solid backing
that the PTSY will get you.
So what, to my understanding, is that instead of only incentive, I mean, this is pretty,
so the simple way to think about this is instead of just incentivizing the portion that would
normally get points, which is the SY, the SY is a pendle wrapped version of the initial deposit asset.
So it's like a pendle wrapped version of the IUSD. Instead of only getting points on that portion of
the LP, which is typically how points work for a lot of LPs, you're getting points on the entire
notional value. And you're also benefiting from the PT yield because the PT is some portion.
So whatever portion of the total LP the PT is, you're also benefiting from that value accrual
by the end of the expiry. Exactly. Someone say yes, I feel good about myself.
It is a double wrapped product in that regard. Yes, there we go.
Yeah.
Okay.
You're not getting that levered exposure.
That is the trade-off you're making.
You're not getting...
You're getting boosted exposure.
Well, you're not getting the...
When I say levered, I mean the YT has the levered exposure to the PTs, to the SY.
Oh, sure.
So you're not getting that.
Yes.
But yes, you are getting the implied yield
from the PT as far as I'm aware.
And you are getting that full dollar value exposure
that otherwise you wouldn't be getting
because half of the LP is PT.
Plus also getting the LP yield,
whatever that may be.
So the LP swap fees.
Swap fees, Jesus.
Those swap fees are juicy.
I've seen what the organic stuff is.
Yeah.
A lot of people don't realize this, but if you play, well, we could get into the weeds here.
But there have been some LPs that have done remarkable volume, especially early on, where the real yield was actually being an early depositor into the LP rather than like a PT holder or like a, you know, a speculator on the points value.
So there are so many games you can play with Pendle, which is probably why.
Wait, wait, Pendle guys, what's your TV on now?
I think we're sitting at like 5.3 sub this morning.
Oh my gosh.
$5.30.
You heard it here first.
5.30 you heard it here first $5.30 yeah
that's $5.3 billion
billions and billions
to channel my inner Trump there
you can see my hand motions here if you were watching me on screen
trillions
right side does not like that
I won't say billions, trillions then
we'll go to trillions, trillions and trillions of dollars soon.
But I mean, it really is asking the question, Pendle,
you guys have meteoric rise this cycle. I think that's obvious.
No one is doubting that.
Everyone understands that Pendle has been the breakout success of the last
cycle and is continuing to climb.
But I don't know if we can talk about this.
You're also launching it like a brand new product very soon
that I am particularly interested in as a hedge or,
which is Boros.
How much are you allowed to say about this?
Yeah, what I would say is that it's coming really soon.
Okay, I'll take that.
Well, it's sooner now than two months ago.
So yeah, I think we'll be making an announcement pretty soon
about the launch that will be happening pretty soon as well.
Pretty soon.
All right.
All right.
Pretty soon.
That's pretty cool.
Rob, you have your hand up, I think.
Yeah, I went and I checked because you got me curious. The organic yield right now on the LP is 7% plus that 4.5x
points full notional exposure. That's sweet. That's a good deal. So if you could then take that,
put it onto Silo, maybe put it onto Morpho in the future, put it onto Orly in the future,
borrow against a 5% rate, then you're having a positive looped yield.
Not only are you the beneficiary of the exposure to the yield
and the exposure to the boosted points,
and you can also extrapolate the value of those points
based off of the IY at any given time,
you are also a net additive value to Pendle
and to the underlying protocol because you are adding more liquidity
per dollar of your principal. So you also cannot get that VE Pendle boost either.
So for LPs as a collateral, sorry, just to jump in here, right? So for LPs as a collateral,
the only thing is that you don't receive
the boosted yield portion.
But even then, you know, the underlying yields,
which is around 5%, I think for InfinitiFi,
is still really sweet, right?
Like you could take that and do some looping strats on that
once we've introduced, say, LP as a collateral for IUSD,
and while still maintaining the exposure to points and preserving your capital.
And there's also, I mean, there's other narratives. We've seen a few liquid locker
protocols that we could name that also have a lot for collateralization. So if this narrative takes
off, which I think it will, then another narrative is taking the liquid locker versions of these,
which do get a benefit or are the beneficiaries of the boosted Pendle LP yields, and then see
those as collateral. Now we've seen that before, but it didn't take off. I think that's because
it wasn't Pendle themselves doing it. But now that you guys are sort of like, I don't know if
co-sponsoring is the word here or co-signing or pushing the narrative of LP leverage, I do think we'll probably see the Liquid Locker LP narrative once again, at least try to take a foothold
into the leveraging space.
Yeah, I think it's definitely a possibility.
We're chatting with Equilibrium and PenPy guys.
They've been amazing exploring different things that we can do in the future.
Love it.
Love to hear it. Okay. I know we said 45 minutes. I'm already there, but let's,
let's get a few like final points in here. No, no, no pun intended. So Pendle is launching new
things. Pendle is exploding in growth. Infinify, I want to ask you guys, you started off with the
bang, right? You guys launched and within week three,
you guys have accumulated up to almost $40 million in TBL.
You're on Pendle.
You're on Fluid.
You're on Morpho.
Your composable Pendle PTs are on Morpho.
Why is composability,
why was composability such a push for you guys?
And then why is composability so important
for a stablecoin protocol?
It's the secret hack to success in this industry.
People want to run leverage loops.
People want to be able to do more things with their stables, especially their yield bearing
stables.
And we see that as our best path to market.
Because if you look at where all the funds are putting their money, if you look at where all
the really big whales are running their own strategies, it's through Pendle, it's through
Morpho, it's through Silo, it's through Euler, it's all these places that people just want to
take out leverage or be the counterparty to somebody else taking out leverage and passively
benefit from that. And that's the classic DeFi paradigm is you're active and you're more passive participants.
The more passive ones accept a lower rate in exchange for not having to do
the incredible amount of legwork that it is to maintain a levered position in some cases.
So we knew that to grow, that to drive TVL into us, we wanted to both establish, hey,
you know, these guys, they're trusted.
They've got that social proof.
And, hey, I'm not just depositing these guys and then sitting there and unable to go do
interesting things with my money.
I'm depositing these guys, and then I can go run the same strategies that I already
strategies that I already do with Infinify. And even more importantly, since IUSD, SIUSD and LIUSD
do with Infinify.
are making higher rates than their respective traditional liquid strategies, for instance,
SIUSD should generally be doing above what Morpho and Euler pools are, and LIUSD should generally
be doing above what the raw PTs are at. Well, you can take SIUSD or LIUSD,
and you can use it in a Morpho vault
that traditionally would be leveraging PTs
or traditionally would be leveraging exposure
to other liquid yields.
And instead, you're using SIUSD or LIUSD
to run those leverage loops.
Well, you've got the same quality collateral back yet.
You have no internal leverage in my system,
but you've got higher yields.
That means that those leverage loops,
which are really limited by,
hey, at what point does the borrowing rate approach
the lending rate that I'm making
off of this native yield in this asset?
Well, there's now more juice
because if borrowers are okay with say
six, 7% right now, and the PT is yielding eight, I can run that loop until my cost to borrow and my
cost, the amount that I'll get from that PT, eight, are now starting to converge.
If it costs me eight to borrow, I'm only going to make eight from PT. There's no point running the
loop. But if the LIUSD is now making 10, okay, I can run that loop more times. I can lever up further. I can drive
that cost of borrowing a little bit higher because I'm able to just get more juice out of that thing.
And so that's where we see our biggest push for growth coming from is as we get LIUSD integrated into these lending markets,
as we have more PTs available for people to lever up against, as we basically embed ourselves as
the default asset of choice when you're setting up those strategies.
Yeah. And I just wanted to add to, I think, you know, I think I think this is obvious now, but like we want to meet our users where where they are.
You know, I think the market has told us that, yeah, they enjoy leverage. Right.
That is where users are and we want to serve those users.
So that was really important to us coming out of coming out of self, you know, launching the MVP, you know, and obviously big thanks to Pendle,
big thanks to all of our partners for kind of trusting us, you know, believing in the model
and kind of fast tracking us in certain situations to get integrated. You know,
that was big for us as well. So more fun times ahead as early as next week. So more to come.
Fantastic. Love to to come. Fantastic.
Love to hear it.
And of course,
I will be particularly interested
in seeing some of those LIs
get composability as well.
So the SI has composability.
IUSD has composability.
PTs have composability.
Now let's see those LIs
get some composability.
All right.
That is it.
Well, first, any questions?
So I'll give people 32 seconds
to one minute to raise their hand, first, any questions? So I'll give people 32 seconds to one minute
to raise their hand if they have any questions.
Or else we will, well, you know what?
Yeah, 30 seconds.
Go ahead.
Any questions?
These can be questions about tranches, about PTs,
Pendle, Boros, maybe, Infinify.
Is that a heartbeat sound?
I need the... That's me mimicking a heartbeat.
All right.
All right.
Well, thank you, everyone, for joining us today.
Go check out Infinify.
Obviously, go check out Pendle soon. Actually, thank you everyone for joining us today. Go check out Infinify. Obviously go check out Pendle soon.
Actually go check out Silo as well. Leverage some,
leverage some LPs and then hopefully even do that on Morpho and Euler as well.
Thank you guys for joining and have a wonderful rest of your day.
Thanks, Steven. Take care.
Thanks for having us.
Thanks guys. Take care.
Bye. care thanks for having us thanks guys take care you wilbert all right bye
