I admit that the opportunity I’m about to share passed me by a couple of times before I fully realized how powerful it is. I think many people are still overlooking it, so I consider it still early.

We know that the points narrative is one of the primary trends in this cycle. Gaining points is usually done by depositing funds somewhere or actively using some product. 

Points can be thought of as yield. By depositing X amount of money, you potentially gain Y amount of tokens. Usually, Y is much smaller than X, which is the reason for the yield analogy. 

Pendle is a yield-oriented project that offers yield separation. In simple terms, the % yield is represented by a token, which can be traded. If someone thinks USDC on Aave will give a 10% yield while now it’s only 1%, they can bet on it. But that’s not really what we’re looking for.

We’re interested in another feature of these yield tokens: points accrual. Points are yield and you can directly buy yield exposure. The effect is as if you’d borrow a large chunk of capital to farm points with the implication that your collateral will deplete more and more until the farming period has ended and your collateral is worth zero.

Your money is burned for points, but you’re getting many more points than if you’d just used the same amount to farm. For instance, you can get over 100x points multiplier on one of Ethena yield tokens.

The strategy of buying Pendle’s yield tokens to farm points has worked well for ETHFI and ENA airdrops. Imagine putting in $10,000, but farming as if you had over $100,000. If the price of the dropped token is high enough (usually the case), your payout should be well above $10,000 burned.

Take a look at Pendle’s points market here. In the top right corner of the site, you will see a chain selector, featuring Ethereum, Arbitrum, and Mantle. Click on each to activate it.

Say, I want to farm Renzo points and save on gas fees. I select Renzo farm on Arbitrum and buy YT (yield tokens).

You can use different tokens to purchase YT. Remember, while you can sell them if you don’t feel like farming points anymore, you will likely get a significantly lower amount back. Think of it as burning your capital for points and determining an amount you can comfortably burn in advance.


That’s it for today!

Head of Research