How to Boost Your swETH Yield with Pendle and Penpie
Learn how to provide swETH liquidity on Pendle and Penpie
Oct 12, 2023
In this guide, we walk you through the process of earning yield on Pendle and Penpie and answer the most frequently asked questions.
Pendle is a yield trading protocol that allows users to speculate on the yield of any yield bearing asset. The asset is split into two parts, the principle token (PT) and the yield token (YT), which each trade separately on Pendle to enable yield trading and speculation of yield direction for the asset.
As a liquid locker for Pendle, Penpie enables you to enjoy boosted Pendle rewards by providing liquidity without needing to hold any vePENDLE.
In addition to providing liquidity, you can take your PNP rewards that you receive from LPing on Penpie and lock these into the PNP vault. This gives you a share of the total fees on Penpie, as well as a share of the swap fees and bribe rewards. As a PNP holder, it also allows you to vote on pools to earn higher yields.
Here are the rewards that swETH holders can enjoy for depositing in Penpie:
Underlying swETH yield from staking with Swell
Pearls in the Swell Voyage (redeemable for $SWELL tokens at TGE)
Priority token (PT) yield and boosted incentives from Pendle
Swap fees from Pendle
PNP rewards from Penpie
How to deposit swETH in Pendle and Penpie
There are two interfaces for interacting with Pendle.
Pendle Earn, which is best suited to beginners and allows users to perform two main functions: fixed yield and liquidity provision.
Pendle Trade, which enables sophisticated swETH holders to trade yield by buying and selling PT and YT.
You can toggle between the two interfaces in the top right corner.
Follow these steps to boost your swETH yield on Pendle and Penpie via Pendle’s Earn feature.
1. Navigate to the ‘Pendle Earn’ UI and locate either of the two swETH pools:
You can deposit ETH or swETH directly into the Pendle PT swETH pool. Deposits are converted to ETH via a swap aggregator. ETH is then swapped to PT swETH, the zero bound bond equivalent of ETH via Pendle AMM.
Unless you intend to trade your Pendle yield tokens (YT), then we recommend that you activate Pendle's Zero Price Impact Mode to minimize slippage. Refer to the Pendle docs for more information.
2. Deposit your Pendle LP tokens in Penpie
Locate the Pendle swETH pool on Penpie, and deposit your Pendle LP tokens. You can also deposit ETH or swETH directly.
3. Optional: Lock your PNP to receive vlPNP
You will receive PNP rewards for LPing on Penpie. Lock these tokens to get vlPNP, which gives you a share of the total revenue generated on Penpie, maximized voting power on Pendle Finance, governance benefits on Penpie and voting power to earn bribe rewards.
Important note: By interacting with smart contracts, you acknowledge and accept the inherent risks — including code vulnerabilities, regulatory uncertainties, and potential for human error — that can result in irreversible losses. Exercise caution and conduct thorough research before participating in smart contract-related activities.