[Serenity Premium] Pendle LP Staking Services, Penpie and Equilibria [3nd Review Jun 2023]

This article covers a slightly complex strategy involving delta neutral hedging GLP and staking in Pendle Finance and its derivatives. This should be read in line with our earlier articles, if you are not familiar with the concepts mentioned in the first sentence:

• GLP

• Pendle Finance: Introduction, Business Model

The Strategy in this Article

This strategy is delta hedging GLP (Arbitrum) using Aave, staking GLP into Pendle Finance and its derivative Penpie.

Current yield: 18.3% (22 July 2023)

Our risk assessment: High

Our yield projection based on this week's Benchmark Yield: 20.3%

The Concept and How the Strategy Work

Overview

GLP is the counterparty pool of GMX.io, a derivative trading platform. GMX allows traders to leverage trade BTC, ETH, LINK and UNI, against a counterparty pool comprising the trading tokens and stablecoins. The GLP is the pool token of counterparty pool. In this strategy, this is the main instrument of investment.

The steps are summarised as follows:

1. Borrow BTC and ETH in Aave with USDC collateral

2. Purchase GLP

3. Deposit GLP into Pendle Finance

4. Deposit Pendle GLP LP into Penpie

Quick Walkthrough