What is Pendle Protocol?
Pendle is a decentralized finance (DeFi) protocol that enables users to tokenize and trade future yield from their yield-bearing assets. By separating the principal and yield components of these assets, Pendle allows for innovative strategies in yield management, including fixed yield investments and yield speculation. This separation provides users with greater flexibility, allowing them to optimize their returns and hedge against market fluctuations.
Operating across multiple blockchains such as Ethereum, Arbitrum, and BNB Chain, Pendle facilitates cross-chain compatibility and enhances liquidity within its ecosystem. The protocol's native token, PENDLE, plays a crucial role by providing staking rewards, governance participation, and liquidity incentives. Through its unique yield tokenization mechanism and specialized Automated Market Maker (AMM) for yield trading, Pendle offers advanced tools for users looking to enhance their yield generation strategies.
What is PENDLE?
PENDLE is the governance token of the Pendle Protocol, launched in 2021 with a total supply of 251 million tokens. Its primary function is to facilitate governance, allowing token holders to participate in decisions related to protocol upgrades and the development of the Pendle ecosystem. By staking PENDLE tokens, users can vote on proposals, ensuring a decentralized governance framework. Additionally, the PENDLE token is utilized to provide liquidity incentives within the platform, enhancing user engagement and participation. It operates on multiple blockchains, including Ethereum, Arbitrum, and BNB Chain.
Risk Statement
Before trading any crypto assets it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
No securities regulatory authority or regulator in Canada has evaluated or endorsed the Crypto Contracts or any of the crypto assets made available through the platform.
Wealthsimple has performed an assessment of whether PENDLE can be supported by Wealthsimple's platform, including whether PENDLE is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated PENDLE based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of PENDLE, including the source code, security and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that first created PENDLE;
- The supply, demand, maturity, utility and liquidity of PENDLE;
- Material technical risks associated with PENDLE, including any code defects, security breaches and other threats concerning PENDLE and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them;
- Legal and regulatory risks associated with PENDLE, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of PENDLE; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdiction regarding whether PENDLE, or generally about whether the type of crypto asset, is a security and/or a derivative.
Wealthsimple monitors ongoing developments related to crypto assets available on its platform for significant changes that may affect Wealthsimple's original assessment of those assets, including Wealthsimple's assessment of the application of securities and derivatives laws. Any significant changes relating to PENDLE may result in changes to this Crypto Asset Statement and/or Wealthsimple's ability to support PENDLE.
Like all other crypto assets, there are some general risks to investing in PENDLE. These include short history risk, volatility risk, liquidity risk, demand risk, forking risk, cryptography risk, regulatory risk, concentration risk, electronic trading risk and cyber security risk. Please review the Wealthsimple Crypto Product Risk Disclosure for additional discussion of general risks associated with the crypto assets made available through the platform.
We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading PENDLE. Investors should perform their own assessment to determine the appropriate level of risk for their personal circumstances.
Wealthsimple is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Wealthsimple Investments Inc. dated December 18, 2023 (the Decision).
The statutory rights of action for damages and rescission in section 130.1 of the Securities Act (Ontario), and, if applicable, similar statutory rights under securities legislation of other jurisdictions of Canada, do not apply in respect of this Crypto Asset Statement to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.
Last updated: January 22, 2025
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