# Pendle V2 App — Full Documentation for AI Systems > Pendle V2 is the trading interface for Pendle Finance's yield tokenization protocol. Trade PT (Principal Tokens) for fixed yield, or YT (Yield Tokens) to speculate on yield. Add liquidity to earn trading fees and PENDLE incentives. Deployed across 12 blockchain networks including Ethereum, Arbitrum, BNB Chain, Base, Mantle, Optimism, Sonic, HyperEVM, Berachain, Monad, Katana, and Ink. ## What is Pendle Finance? Pendle Finance is a permissionless, decentralized yield-trading protocol that enables users to tokenize and trade the future yield of yield-bearing assets. It wraps yield-bearing tokens into Standardized Yield tokens (SY), then splits them into two components: Principal Tokens (PT) and Yield Tokens (YT). This separation allows yield to be isolated and traded independently from the principal. PT holders lock in fixed yield by purchasing at a discount and redeeming at face value on maturity — functioning like a zero-coupon bond. YT holders receive all the streaming yield and rewards from the underlying asset, with amplified exposure due to YT's lower price relative to the underlying. Both tokens trade through Pendle's custom AMM, which is specifically engineered for time-decaying yield assets. Pendle is deployed across 12 blockchain networks including Ethereum, Arbitrum, BNB Chain, Base, and Sonic. By enabling yield to be traded as a financial instrument, Pendle brings over $400 trillion of traditional finance interest-rate derivative strategies — fixed-income, yield speculation, and hedging — into accessible, permissionless DeFi markets. ## Main Sections - [Markets](https://app.pendle.finance/trade/markets): Browse all active yield markets across supported chains. Each market has a fixed expiry date; PT trades at a discount to face value; YT captures streaming yield and rewards. - [Pools](https://app.pendle.finance/trade/pools): Provide liquidity to earn four simultaneous yield sources — PT fixed yield, underlying SY yield, swap fees, and PENDLE incentives. - [Dashboard](https://app.pendle.finance/trade/dashboard/overview/positions): View your positions, open orders, portfolio P&L, and claim accumulated YT yield and rewards. - [Education](https://app.pendle.finance/trade/education): Learn about yield trading strategies — PT fixed yield, YT speculation and rewards farming, and LP strategies. - [sPENDLE](https://app.pendle.finance/spendle/stake/in): Liquid staking for PENDLE tokens. Stake 1:1 to earn 80% of protocol swap and yield fees as PENDLE buybacks distributed every two weeks. - [Governance](https://app.pendle.finance/spendle/governance): sPENDLE voting and protocol fee distribution. Active sPENDLE holders vote on Pendle Protocol Proposals. - [Cross-chain PT](https://app.pendle.finance/trade/crosschain-pt): Bridge Principal Tokens across chains — use PT minted on one network as collateral on Avalanche, Unichain, and other supported destinations. ## Protocol Mechanics ### Yield Tokenization Pendle wraps yield-bearing tokens (stETH, sUSDe, aUSDC, ezETH, and others) into Standardized Yield tokens (SY), then splits them into Principal Tokens (PT) and Yield Tokens (YT). ### Principal Tokens (PT) A Principal Token represents the principal component of a yield-bearing asset and functions similarly to a zero-coupon bond in traditional finance. When deposited into Pendle, a yield-bearing token is split: the yield stream goes to a Yield Token (YT), and the principal is represented by PT. At maturity, PT redeems at a 1:1 ratio for the accounting asset — for example, PT-stETH redeems for the equivalent value in stETH. Because PT is purchased at a discount to its maturity value, the difference represents a fixed yield locked in at the time of purchase. This return is not affected by variable yield fluctuations in the underlying protocol, making PT a tool for earning predictable fixed income in DeFi. PT holders receive no ongoing yield or points — those flow entirely to YT holders. A common use case is deploying PT as collateral in money markets such as Aave and Morpho, where its predictable maturity value reduces liquidation risk. Two redemption mechanics apply: rebasing assets like stETH and aUSDC increase in token count over time, while interest-bearing assets like wstETH and ezETH increase in per-token value. In both cases, PT redeems 1:1 for the accounting asset at maturity. ### Yield Tokens (YT) A Yield Token represents the yield-generating portion of a yield-bearing asset. Holders receive all streaming yield and rewards — including points, airdrops, and governance tokens — generated by the underlying protocol up until the token's expiry. The rate displayed to YT holders is the Underlying APY from the base protocol. Because YTs trade at a fraction of the underlying asset's price, they provide amplified exposure to yield movements — effectively a form of leverage on yield. A minor increase in the underlying protocol's APY can generate outsized percentage returns on a YT position, making them attractive for yield speculation and rewards farming. YT value consistently decays toward zero as maturity approaches. Under constant implied yield conditions, the price declines proportionally with remaining time. The market's Implied APY is the pricing rate for YT — a position is profitable when actual average yield over the period exceeds the implied rate paid at purchase. Users can claim accumulated yield and rewards at any time through the Pendle Dashboard, without waiting for maturity. Upon expiry, YT reaches zero value automatically. ### Pendle AMM The Pendle AMM is a specialized automated market maker purpose-built for time-decaying yield assets. Rather than concentrating liquidity within a static price range, it concentrates liquidity within a pre-configured yield range called the Implied APY range, which dramatically reduces slippage for trades within expected yield boundaries. The AMM curve dynamically tightens over time through an algorithm that accounts for yield already accrued and decreasing time-to-maturity, minimizing impermanent loss for liquidity providers as uncertainty narrows. A key innovation is the single-pool flash swap mechanism: because the price relationship P(PT) + P(YT) = P(underlying) always holds, YT trades are routed through the PT liquidity pool via flash swaps, meaning both tokens share a single pool of capital. Liquidity providers earn from four simultaneous sources: PT fixed yield, underlying SY yield, swap fees (which scale with time-to-maturity), and PENDLE token incentives. ### Liquidity Provision Liquidity providers on Pendle V2 deposit into PT/SY pools and earn trading fees plus PENDLE incentives. Because PT converges to face value at maturity, LP positions have a known floor — LPs are not exposed to the same impermanent loss dynamics as in standard AMMs. Liquidity is single-sided: you deposit the underlying asset and Pendle handles the split internally. ### sPENDLE — Liquid Staking & Governance sPENDLE is Pendle Finance's liquid staking and governance token. Users stake PENDLE at a 1:1 ratio to receive sPENDLE instantly, and can unstake via two options: a standard 14-day withdrawal period for a 1:1 redemption, or immediate unstaking with a 5% fee. sPENDLE holders who remain active in protocol governance earn a share of Pendle's protocol revenue. The protocol allocates 80% of fees generated from yield accrual and swap activity to buy back PENDLE tokens on the open market, then distributes them to active sPENDLE holders every two weeks via merkle distribution through the Pendle dApp. A holder is considered active as long as they vote when a Pendle Protocol Proposal is available, or have their sPENDLE deployed in an eligible DeFi integration — in which case it is automatically considered active at all times. Unlike many staking derivatives, sPENDLE does not appreciate in value over time — its PENDLE redemption ratio remains fixed at 1:1. It is fully fungible and composable, enabling use across the DeFi ecosystem. ## Supported Blockchains Pendle V2 is deployed on 12 blockchain networks: Ethereum (the primary deployment), Arbitrum, BNB Chain, Mantle, Optimism, Base, Sonic, HyperEVM, Berachain, Monad, Katana, and Ink. Each network has its own set of verified smart contract deployments accessible through the Pendle GitHub repository, organized by chain ID. Beyond native deployments, Pendle supports cross-chain PT bridging, allowing Principal Tokens minted on one network to be bridged to supported destination chains such as Avalanche and Unichain. This expands where PT can be used as collateral or redeemed without requiring the underlying market to exist on every chain. ## Security Pendle V2 smart contracts have been audited by multiple independent security firms including ChainSecurity, Spearbit, WatchPug, Dedaub, and Dingbats. Audit reports are publicly available at https://github.com/pendle-finance/pendle-core-v2-public/tree/main/audits/. ## Ecosystem (Pencosystem) 35+ DeFi protocol integrations including Aave, Morpho, Yearn, Euler, Coinbase-backed protocols, Binance, OKX, and others. PT is accepted as collateral across major money markets. The Pencosystem extends PT and YT usability across all supported chains. View all integrations at https://pendle.finance/pencosystem. ## Documentation - [Pendle V2 Docs](https://docs.pendle.finance/): Core protocol mechanics, AMM design, sPENDLE system - [Pendle Academy](https://app.pendle.finance/trade/education/learn): Step-by-step yield trading guides - [Developer Docs & API](https://api-v2.pendle.finance/core/docs): Contract addresses by chain, integration guides ## About Pendle Finance - Founded: 2021 - Website: https://pendle.finance - GitHub: https://github.com/pendle-finance - Twitter / X: https://twitter.com/pendle_fi - Discord: https://pendle.finance/discord - Telegram: https://t.me/pendlefinance - Medium: https://medium.com/pendle - LinkedIn: https://www.linkedin.com/company/pendlefinance/ - CoinGecko: https://www.coingecko.com/en/coins/pendle - CoinMarketCap: https://coinmarketcap.com/currencies/pendle/ - DeFiLlama: https://defillama.com/protocol/pendle - Analytics: https://analytics.pendle.finance