Binance Labs revealed in its recent announcement supporting Pendle Finance, marking another investment shot in the liquid staking segment. The venture unit of the world’s largest crypto exchange by transaction volume, Binance, made an undisclosed investment in the liquid staking platform Pendle Finance.
The investment is set to scale the decentralized finance (DeFi) application that primarily prioritizes yield tokenization. Pendle Finance spokesperson restated that the protocol will orient the funding towards facilitating the multichain expansion to accommodate retail and institutional users.
Pendle Finance to Leverage Binance Labs’ Expertise and Resources
Pendle Finance chief executive and co-founder TN Lee lauded the investment committed by Binance Labs. The funding came when Pendle Finance protocol confirmed supporting three blockchains, including BNB Chain, Arbitrum, and Ethereum. He added the protocol would leverage Binance Labs’ expertise and resources to scale its reach.
Binance Labs profiled Pendle Finance’s fixed yield offering as critical in facilitating the liquid staking project’s growth. The statement read that liquid staking was a crucial input that has become the backbone of institutional hedging.
Pendle Finance offers a fixed yield that mirrors bond-like assets. It features the split yield-earning token such as Lido’s stETH. As such, it features a principal token that lacks yields alongside the bearing component.
Pendle Finance allows the users to acquire the cheaper principal token component though discounted. Later, the users redeem the element during its maturity to benefit from the yield generated. Pendle Finance offers users access to 5.37% and 2.93% fixed yield on Lido’s stETH and Tether’s USDT, respectively.
Binance optimistic on liquid Staking
Binance Labs is optimistic that liquid staking derivatives have a critical input besides traditional financing. It acknowledges the findings that liquid staking derivatives (LSD) account for 45% of deposits in Pendle Finance, as indicated by DeFiLlama data.
Further, liquid staking protocols are increasing uptake to approximately $20.16 billion. The amount dewars $12.77 billion in lending protocols and $12.07 billion within the decentralized exchanges.
Binance Labs executive recognized that the LSDfi sector is portraying a tailwind experience with the size of the total assets growing exponentially. The executive indicated that the LSD assets, native yield-bearing assets, would ultimately become the primary underlying asset within the decentralized finance (DeFi) landscape.
The Binance Labs executive identified LSDfi as the application placing LSD tokens, including stETH, into DeFi usage to derive additional yields. The investment in Pendle Finance marks the second platform within the LSDfi segment besides the $10 million committed to Helio Protocol.
Binance executive disclosed that it was benefiting from 10 times returns from various investments. It estimated the portfolio value as $9 billion, mainly from the 200 projects spread over 25 countries.
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