Pendle Tutorial: Complete Guide

This tutorial will walk you through all core Pendle operations step by step, from basic wallet connection and buying PT to lock in fixed yields, to advanced YT trading, LP liquidity provision, and vePENDLE governance staking.

If you're not yet familiar with how Pendle works, we recommend reading the Complete Pendle Introduction first to understand basic concepts like PT, YT, and SY.

Pre-Use Preparation

Prepare a Crypto Wallet

You need a Web3 wallet that supports the Ethereum ecosystem. We recommend using MetaMask:

1. Visit the MetaMask official website to download and install the browser extension
2. Create a new wallet or import an existing one
3. Safely store your seed phrase (12 English words)
4. Add the Arbitrum network to MetaMask:
   • Network Name: Arbitrum One
   • RPC URL: https://arb1.arbitrum.io/rpc
   • Chain ID: 42161
   • Currency Symbol: ETH
   • Block Explorer: https://arbiscan.io

Prepare Funds

Using Pendle requires two types of funds:

1. Gas Fees: Operating on Arbitrum requires ETH to pay transaction fees. We recommend preparing at least 0.005 ETH (approximately $15-20 USD), sufficient for multiple transactions
2. Investment Assets: The tokens you want to invest, such as ETH, USDC, USDT, etc. The amount depends on your investment plan. Beginners should start with small amounts ($100-500 USD)

When withdrawing from centralized exchanges to your Arbitrum wallet, make sure to select the "Arbitrum One" network, not Ethereum mainnet or other chains.

Obtain Underlying Assets (Optional)

Pendle pools typically require yield-bearing assets (like stETH, sDAI) as underlying assets. However, Pendle provides a Zap function that allows you to directly purchase PT or YT with a single asset (like ETH, USDC), and the system will automatically convert it to the required underlying asset.

Choose a Blockchain

Pendle supports multiple blockchains, each with pros and cons:

Beginners should start with Arbitrum, which has low fees and a mature ecosystem.

Step 1: Connect to Pendle App

Access Pendle Website

1. Enter the official Pendle URL in your browser: app.pendle.finance
2. Confirm the domain name in the address bar is correct and shows a padlock icon (HTTPS secure connection)

Connect Wallet

1. Click the "Connect Wallet" button in the top right corner
2. Select your wallet type (MetaMask, WalletConnect, etc.) in the popup window
3. MetaMask will show a confirmation window—click "Connect" to authorize Pendle to read your wallet address
4. After successful connection, select the blockchain network you want to operate on (Arbitrum recommended)

Once connected, the top right corner will display your wallet address (simplified display, like 0x1234...5678).

Interface Navigation

The Pendle app is divided into several main sections:

• Dashboard: Overview of your positions, including PT, YT, LP positions, and claimable rewards
• Trade: Where you trade PT and YT, buying or selling
• Pool: Interface for providing liquidity (LP)
• vePENDLE: Stake PENDLE tokens to participate in governance and earn additional yields
• Points: View your accumulated points and airdrop eligibility

Step 2: Buy PT (Lock in Fixed Yield)

Buying PT (Principal Token) is the most basic and safest Pendle operation, suitable for conservative investors seeking to lock in fixed yields.

Choose a Pool

1. Click "Trade" in the left menu to enter the trading page
2. You'll see a list of all available Pendle pools, each representing a yield-bearing asset and expiry date combination
3. Key information includes:
   • Underlying Asset: E.g., stETH (Lido staked ETH), sDAI (Spark stablecoin)
   • Maturity: PT expiry date, e.g., 31 DEC 2026
   • Fixed APY: Current annual yield rate you can lock in by buying PT
   • Liquidity: Pool liquidity depth—higher liquidity means lower slippage

Pool Selection Recommendations

Execute Purchase

Assuming you choose to buy "PT-stETH-31DEC2026":

1. Click the pool to enter the trading page
2. Under the "Buy PT" tab, select the token you want to use for purchase:
   • If you have stETH, you can buy directly with stETH
   • If you only have ETH or USDC, select "Zap" mode and the system will automatically convert
3. Enter the amount you want to invest, e.g., 1 ETH
4. The system will display the PT amount you'll receive and the Fixed APY (locked yield rate)
5. After confirmation, click "Buy PT"
6. MetaMask will prompt for authorization twice:
   • First: Authorize the Pendle contract to use your tokens (Approve)
   • Second: Execute the actual purchase transaction (Swap)
7. After transaction confirmation, your PT will appear in the "PT Holdings" section of the Dashboard
8. PT will automatically start accumulating yield and can be redeemed 1:1 for the underlying asset at expiry

Redeem After Expiry

When PT expires (e.g., December 31, 2026):

1. Go to "Dashboard"
2. Find the expired PT position, which will show a "Matured" label
3. Click the "Redeem" button
4. Confirm the redemption amount and click "Confirm"
5. After signing the transaction, you'll receive the underlying asset (like stETH) in your wallet

Expired PT won't disappear—you can redeem anytime, but it won't continue generating yield.

Step 3: Trade YT (Advanced/Speculative)

YT (Yield Token) represents ownership of future yields and is a more advanced and speculative strategy.

When to Buy YT?

Scenarios suitable for buying YT:

1. Expected yield rate increase: E.g., you believe ETH staking yields will rise due to increased network activity
2. Expected airdrops: Some yield-bearing assets distribute airdrops to holders, and holding YT also qualifies
3. Short-term speculation: Willing to risk total principal loss, betting on significant yield rate volatility

Situations not suitable for buying YT:

• Seeking stable yields (should buy PT instead)
• Don't understand the underlying asset's yield sources
• Cannot tolerate the risk of total principal loss

Execute YT Purchase

1. Go to the "Trade" page and select the pool you want to trade
2. Switch to the "Buy YT" tab
3. Select payment token (Zap mode recommended)
4. Enter purchase amount
5. Focus on two key metrics:
   • Implied APY: Current market-implied annual yield rate
   • Breakeven APY: The actual yield rate needed to break even
6. If Breakeven APY is much higher than historical average yield rates, it indicates high risk
7. After confirmation, click "Buy YT" and sign the transaction

How YT Yields Work

After purchasing YT:

1. Yields generated by the underlying asset automatically accumulate in your YT position
2. You can click "Claim Rewards" in the Dashboard anytime to claim accumulated yields
3. YT's market price fluctuates with time passage and yield rate changes
4. At expiry, YT's value goes to zero, but the accumulated yields you've claimed are actual profits

Step 4: Provide Liquidity (LP)

Providing liquidity to Pendle pools earns trading fees, underlying yields, and PENDLE token rewards—a moderate-risk advanced strategy.

What Makes Pendle LP Special

Unlike traditional AMMs (like Uniswap), Pendle LP has several unique characteristics:

1. Composition: LP consists of PT + SY (Standardized Yield Token), not a fixed 50:50 ratio
2. Lower impermanent loss: PT prices converge to face value as expiry approaches, reducing price deviation
3. Multiple yields: Besides trading fees, you earn underlying asset yields and PENDLE rewards

Operation Steps

1. Go to the "Pool" page
2. Select the pool you want to provide liquidity for—choose pools with high liquidity and trading volume
3. Click "Add Liquidity"
4. Choose liquidity provision mode:
   • Zap Mode: Use a single token (like ETH, USDC) and the system automatically allocates
   • Manual Mode: Manually specify PT and SY ratio
5. Beginners should use Zap mode—enter the investment amount
6. The system displays the LP token amount you'll receive and current APY
7. After confirmation, click "Add Liquidity" and sign the transaction
8. LP tokens automatically start accumulating rewards, viewable in Dashboard

LP Yield Composition

Actual yields vary with market conditions, pool popularity, and time to expiry.

Step 5: vePENDLE Staking (Governance)

vePENDLE is Pendle's governance token. Staking PENDLE grants voting rights, fee sharing, and LP yield boosts.

Why Stake PENDLE?

Benefits of staking PENDLE:

1. Voting Rights: Participate in protocol governance, deciding which pools receive PENDLE reward allocations
2. Fee Sharing: Receive a portion of trading fees generated by the protocol (distributed in ETH/USDC, etc.)
3. LP Yield Boost: Increase your LP position yields, up to 2.5x boost
4. Protocol Participation: Support Pendle ecosystem development, a long-term holder strategy

Operation Steps

1. First purchase PENDLE tokens:
   • Buy on DEXs like Uniswap, SushiSwap
   • Or buy on centralized exchanges (Binance, OKX) then withdraw to chain
2. Go to the "vePENDLE" page in Pendle app
3. Click "Lock PENDLE"
4. Enter the amount of PENDLE you want to stake
5. Select lock duration (max 2 years—longer locks receive more vePENDLE)
6. Confirm and sign the transaction
7. After successful staking, you can vote for your preferred pools on the "Vote" page
8. Every Thursday, claim fee sharing on the "Claim" page

sPENDLE (New Version)

Pendle is promoting a new staking mechanism sPENDLE with the following features:

• No lock period, can redeem anytime (but redemption has a 7-day waiting period)
• Simplified staking interface, more beginner-friendly
• Will expand to off-chain yield rate trading markets in the future

Beginners can start with sPENDLE, then consider longer-term vePENDLE locks after gaining familiarity.

Useful Tools and Resources

Monitor Positions

Regularly check your Pendle position status:

1. Pendle Dashboard: View all positions, claimable rewards, and transaction history after logging in at app.pendle.finance
2. DeBank (debank.com): Multi-chain DeFi position tracker supporting Pendle protocol
3. Zapper (zapper.xyz): Similar to DeBank, visualizes your DeFi portfolio
4. Pendle Discord: Official community for asking technical questions and getting latest updates

Analyze Data

Deep dive into Pendle pool data:

1. Pendle Analytics Page: View TVL, volume, and APY history for all pools at app.pendle.finance/analytics
2. DeFiLlama: Track Pendle's overall TVL and distribution across chains
3. Dune Analytics: Community-created Pendle data dashboards for deep on-chain behavior analysis

Security Considerations

Summary

Here's a comparison of difficulty and risk for various Pendle operations:

Beginners should start by buying PT, then gradually try providing LP or trading YT after becoming familiar with the interface and processes. Remember:

• First read the Complete Pendle Introduction to understand basic concepts
• Test with small amounts on Arbitrum where gas fees are low
• Don't invest all funds at once—build positions gradually
• Regularly check positions, remember to redeem or migrate before expiry

Once you master Pendle, you can flexibly use fixed yield and yield rate trading strategies to achieve more stable returns in DeFi markets.

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Further Reading

• Complete Pendle Introduction
• Pendle Yield Strategies
• DeFi Beginner's Guide
• Crypto Wallet Basics
• Uniswap Tutorial