Pendle is the first protocol that enables the trading of tokenized future yield on an AMM system. We aim to give holders of yield-generating assets the opportunity to generate additional yield and to lock in future yield upfront, while offering traders direct exposure to future yield streams, without the need for an underlying collateral. Holders of yield-generating assets deposit their yield-bearing tokens into Pendle in order to mint an Ownership Token (OT) and a Future-Yield Token (XYT). Users can then utilize their XYT in two different ways. Firstly, they can deposit their XYT into Pendle’s AMMs to provide liquidity to Pendle. In return, fees and other incentives are given to these liquidity providers (LP). Secondly, they can sell their XYT for cash upfront, allowing them to fix the interest rates and lock in their returns immediately. Traders will be able to buy these XYTs directly, without the need to lock up their underlying assets. This is a more capital-efficient way for them to gain exposure to future yield.