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In a strategic move to boost the burgeoning landscape of decentralized finance (DeFi), Spartan Capital has announced its continued commitment to Pendle Finance through an over-the-counter (OTC) acquisition.
We're excited to share that we have made a follow-on investment in @pendle_fi through an OTC purchase.
We recognize the transformative potential of Pendle and their pivotal role in driving the advancement of on-chain yield trading.
Our strong partnership with Pendle dates back… pic.twitter.com/v2RkSMOiHj
— The Spartan Group (@TheSpartanGroup) November 9, 2023
As revealed in a Medium post on November 9, this new investment underscores the venture capital (VC) firm’s strong belief in Pendle’s innovative approach to the on-chain yield market.
Prior to this move, Spartan Capital has been a pioneering supporter of Pendle Finance, advocating for its objectives since its debut in 2021.
Spartan Capital has been with Pendle since the very beginning of our journey since the days of Pendle V1.
It's an honour to link hands with one of our longest supporters once more on our next leg of journey, as we strive to reshape the crypto landscape together 🤝 https://t.co/7C1t8g5DQu
— Pendle (@pendle_fi) November 9, 2023
The VC also pointed out the huge popularity of interest rate derivatives. These are financial contracts tied to interest rates or assets with interest. They have an enormous value, reaching hundreds of trillions each year, and play an important role in the traditional financial market.
Pendle Finance has solidified itself as a clear leader in the Liquid Staking Derivatives and LSDfi development, with the latest utility integration, including Real-World Assets (RWA).
The company’s role in bridging these tools into the DeFi ecosystem is an indicator of the interest rate derivative sector maturity and potential growth trajectory.
On a closing note, Kelvin Koh, the Managing Partner of Spartan Capital, stated that the convergence of Liquid Staking Derivatives and Real World Assets provides an exceptional landmine for the DeFi sector.
Koh also praised the Pendle Finance yield trading toolkit, highlighting its ability to create value for digital or yield-bearing assets.
Pendle’s Unique Work Structure and Latest Materoric Trajectory
Pendle Finance uses a dual token to tokenize investments in DeFi protocols like Compound or Aave.
This unique model divides the investment into two components – the initial principle put up by an investor and the future yield, which represents rewards for tokens.
This is done by bundling up yield-bearing tokens into standardized yield tokens. This yield token is further wrapped into a principle token (PT) or yield token (YT), allowing investors to trade their DeFi positions on the open market.
Pendle’s unique approach has garnered significant attention and growth in recent times. According to DefiLlama, Pendle’s Total Value Locked (TVL) has witnessed an astonishing 2,442% surge since the introduction of Pendle V2.
It has soared from $7.55 million on November 30, 2022, to an impressive current value of $193.24 million.
This substantial growth has propelled Pendle Finance to the 4th position in the top Yield TVL rankings at press time.
This surge comes when the broader DeFi landscape has seen substantial funding despite a decline in overall DeFi-related economic activity in 2023.
Pendle’s robust growth underscores its resilience and appeal within the DeFi, positioning it as a major player amid changing market dynamics.
Another notable upward trajectory is its recent funding from Binance Labs, the investment arm of Binance Global Exchange, on August 23.
The trading platform disclosed its investment in Pendle Finance to facilitate its tokenization and trading of yields.
We're excited to announce that we'v invested in @pendle_fi!
Pendle Finance is a yield derivative protocol that enables users to execute advanced yield strategies, bringing the TradFi interest derivative market to DeFi.https://t.co/CDDXCWRCbQ
— Binance Labs Fund (@BinanceLabs) August 23, 2023
This move signifies Binance’s broader vision of actively participating in and promoting the evolution of decentralized finance in the financial ecosystem.