Is it really profitable to purchase Pendle YT leverage points? Investors need to carefully consider the balance between airdrop earnings and costs. This article will provide investors with data-driven insights through detailed return rate calculations, along with an Excel spreadsheet, to enhance their confidence and decision-making foundation in investing in YT.
(Table of Contents:
Step 1: Calculate the points earned from YT per day
Step 2: Calculate the percentage of points earned during airdrop
Step 3: Reveal the investment return rate
Step 4: Adjust FDV calculation for corresponding return rates)
As the number of points obtained during a current project airdrop is determined by the amount of points held by users, Pendle, a leverage points trading protocol, has become a market focus. Since the beginning of the year, PENDLE has surged over 424%, with a Total Value Locked (TVL) exceeding $5 billion, growing nearly 22 times compared to the initial $230 million.
On the 22nd, Pendle launched the ezETH liquidity pool (Renzo’s liquidity token for collateralized borrowing and lending) on both the Ethereum and BNB chains, providing users with an opportunity to earn 3 times the points.
However, considering the risk that the value of holding YT tokens will become zero by the expiration date, investors may be concerned that the future airdrop earnings may not be enough to offset the costs of purchasing YT. Therefore, this article will provide a detailed return rate calculation, analyze the potential returns of investing in YT-ezETH and holding until the expiration date, to provide reference for investors and enhance their confidence. The article will also share an Excel spreadsheet for interested readers to operate.
First, in the “Pendle on YT” column in Figure 1, we need to fill in the current multiplier for points provided by Pendle, which is currently 3. Next, fill in the current price of ETH in the “ETH Price” field, which is the cost of entering the investment now.
Figure 1
In the “Putting 1 ETH into YT” field, you need to go to the Pendle website and select ETH in the Input field and enter 1, then you can see that it can be exchanged for 6.9582 YT ezETH. This means that participants can earn points equivalent to 6.9582 YT ezETH by investing 1 ETH, which is the essence of Pendle allowing users to leverage points.
In the “Points per ETH per day” field, you need to refer to the official documentation to calculate the points. Without considering any incentives, you can see that depositing 1 ETH per hour can earn 1 point, and 24 points per day. With Pendle’s 3x multiplier, fill in 72 (the Excel formula is already filled in).
“Points earned per day from YT” represents how many points participants can earn by holding 1 ETH, which is 6.9582 multiplied by 72, equaling 500.99 (the Excel formula is already filled in).
Pendle website
“Snapshot day” and “Days holding YT”: Renzo has announced that the first airdrop snapshot will take place on April 26th, and has hinted that the points activity will continue until the end of the year. Taking the ezETH liquidity pool on the Ethereum mainnet as an example, the expiration date of this pool is December 26th, so this date is used as the snapshot date for the final airdrop at the end of the year. There are 245 days remaining from today to that date.
Note: Pay attention to any updates to the points rules and modify the “Points per ETH per day” field accordingly in Step 1.
“Total points in the end” is calculated by multiplying 245 by the daily points earned, which equals 122,742.648 points (the Excel formula is already filled in).
“Current Points”: Checking the Renzo website, it can be seen that a total of 1.37 billion points have been distributed.
“Total points upon Airdrop” and “Share in points” are hypothetical data. Assuming that Renzo will distribute 4 times more points than the current points on December 26th, users who currently purchase YT will account for 0.002% of the points.
Figure 2
“FDV $” is hypothetical data, which can be obtained more accurately after the listing of $REZ on Binance on the 30th. Currently, $ETHFI, the only liquidity collateralized borrowing and lending protocol, is used as a conservative estimate with an FDV of $3.885 billion, assuming it is $2.5 billion.
“Airdrop allocated %” is based on Renzo’s token economics, where airdrops will account for 10% of the total supply, and the first airdrop will distribute 5%. Therefore, it is estimated that the remaining 5% of the airdrop will be completed by the end of this year.
“Total airdrop $” is the total value of the airdrop, which is the FDV of $2.5 billion multiplied by the 5% allocation, equaling $125 million (the Excel formula is already filled in).
“My Return in $” is the return calculated by multiplying the total airdrop value by the 0.002% point ratio, equaling $2,799 (the Excel formula is already filled in).
“Return %” and “APY %” are calculated by comparing the return of $2,799 to the cost of purchasing ETH, resulting in -13.85%, and an annualized return rate of -20.64%. It seems that…investing in YT needs to be carefully considered.
Figure 3
Finally, by viewing the investment return rates under different FDV thresholds, it can be observed that the return rate turns positive after $3 billion. These parts of the Excel table have already been filled in.
Here, an Excel spreadsheet is provided for interested readers to freely operate.
Figure 4
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