Pendle Finance raises $3.5M to launch secondary market for DeFi yields

The company is building a tokenization platform to better enable users to manage their DeFi yields.

Pendle Finance, a decentralized finance protocol that allows users to tokenize and sell future yields, has completed a private investment round worth $3.5 million to power the next phase of its platform’s evolution. 

The private investment round included contributions from several companies, including CMS, DeFi Alliance, Lemniscap, Hashkey Capital, imToken and Spartan Group, among others. The team is being advised by industry leaders from such projects as Kyber Network and KeeperDAO.

Pendle’s co-founder, referred to as “TN,” said his platform allows users to trade the “ever-increasing yield” offered by DeFi products in a secondary market. He explained:

“By giving everybody the ability to easily hedge, trade and arbitrage yield, we allow our users to actively manage their exposure. Bringing greater visibility and control to yield markets is necessary for the maturation of the space.”

Created in October 2020, Pendle has designed a protocol that lets users separate future yield from their base yield-bearing assets. The platform offers an automated market maker, or AMM, that allows users to trade future yield tokens. Users can sell their yield tokens to lock in profits and receive upfront cash. They can also purchase the tokens to gain exposure to fluctuating yields.

DeFi has attracted an influx of new investors thanks to attractive yields and increased access to peer-to-peer lending opportunities. Some of the leading DeFi lending protocols offer annual percentage yields that are in the high double digits. These platforms have paid out hundreds of millions of dollars in rewards to depositors.

More than 300 DeFi projects are listed on CoinMarketCap. Their combined market value is $119 billion, having increased 26.9%.