Is buying Pendle YT leveraged points really as high in return as it seems? 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 and an accompanying Excel spreadsheet to enhance investors’ confidence and decision-making foundation in investing in YT.
(Table of Contents:
Step 1: Calculating the points earned per day from YT
Step 2: Calculating the proportion of points earned from airdrops
Step 3: Revealing investment return rates
Step 4: Adjusting FDV to calculate corresponding return rates)
Current new projects’ airdrops depend on the amount of points users have, and the leveraged point trading protocol Pendle has become the market focus. Since the beginning of the year, PENDLE has surged over 424%, and its TVL has exceeded $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 lending) on both the Ethereum and BNB chains, providing users with the opportunity to earn triple points.
However, considering the risk of the value of holding YT tokens becoming zero at maturity, investors may be concerned that the future airdrop earnings may not be sufficient to offset the cost of purchasing YT. Therefore, this article will provide a detailed return rate calculation, analyzing the potential returns of investing in YT-ezETH and holding until maturity, for investors’ reference and to enhance their confidence. This article will also share an Excel spreadsheet for interested readers to operate.
First, in the “Points on Pendle” field in Figure 1: we must fill in the current multiple of points provided by Pendle, which is currently 3. Then, fill in the current price of ETH in the “ETH Price” field, which is the cost of entering the investment now.
In the “Putting 1 ETH into YT” field: you need to go to the Pendle website, choose ETH in the Input field, enter 1, and you will see that it can be exchanged for 6.9582 YT ezETH. This means that participants can earn points by leveraging 1 ETH to earn 6.9582 YT ezETH, which is what Pendle allows users to do.
In the “Points per ETH per day” field: calculate the points according to the official documents. Without considering any incentives, you can see that depositing 1 ETH per hour can earn 1 point, and 24 points per day. Pendle provides a triple bonus, so fill in 72 (the Excel formula is already filled in).
In the “Points earned per day from YT” field: this represents how many points participants can earn by holding 1 ETH, which is 6.9582 multiplied by 72, equal to 500.99 (the Excel formula is already filled in).
“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 point 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 the pool is December 26th, so the snapshot date for the final airdrop at the end of this year is taken as that date, and today is 245 days away from that date.
Note: Pay attention to any updates to the points rules and adjust the “Points per ETH per day” field accordingly.
“Total points in the end”: multiply 245 by 500.99 points that can be earned per day, equal to 122,742.648 points (the Excel formula is already filled in).
“Current Points”: according to the Renzo official website, a total of 1.37 billion points have been distributed.
“Total points upon Airdrop” and “Share in points”: these are hypothetical data, assuming that Renzo will distribute 4 times more points than the current points on December 26th. In this case, users who buy YT now will account for 0.002% of the points.
“FDV $”: FDV is hypothetical data, and more definitive data can be obtained after $REZ is listed on Binance for 30 days. Currently, we estimate based on the conservative estimate of $ETHFI, the only issued liquidity collateral lending protocol, with an FDV of $3.885 billion, assuming $2.5 billion.
“Airdrop allocated %”: According to Renzo’s token economics, 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 airdrops will be completed by the end of this year.
“Total airdrop $”: This is the total value of the airdrop, which is the FDV of $2.5 billion multiplied by the 5% airdrop allocation, equal to $125 million (the Excel formula is already filled in).
“My Return in $”: The return is the total airdrop value multiplied by the 0.002% point ratio, equal to $2,799 (the Excel formula is already filled in).
“Return %” and “APY %”: The return rate is $2,799 compared to the cost of buying ETH at the current price, equal to -13.85%. The annual return rate is -20.64%. It seems that… investing in YT still needs careful consideration.
Finally, by checking the investment return rates at different FDV levels, it can be observed that the return rate turns positive after $3 billion. The corresponding Excel formulas are already filled in.
Here is also the Excel spreadsheet provided, where interested readers can freely operate.