Pendle Ether.fi YT Tiger
Product Details & Payoff Scenarios
Deposit YT-eETH and earn a high fixed yield. (For Pendle YT tokens, the time of its maturity is 00:00 UTC on the date specified on the token. For more information, please see Pendle's documentation).
Strategic Use Cases
You hold YT-eETH and want to maximize yield on your holdings
You want to earn yield in YT-eETH
You are comfortable selling your YT-eETH for weETH at a profit if the market conditions are favorable (-10%).
Payoff Scenarios
For each scenario below, assume the following:
100 YT-eETH-26Sep24 investment in the 'Pendle Ether.fi YT Tiger' Vault
Pendle Ether.fi-YT Tiger terms:
Investment duration: 27-day
Underlying asset = YT-eETH-26Sep24
Strike price = 90%
APY = 16.63% (1.15% per 27-day vault)
YT-eETH-26Sep24 price on Day 1 = 0.0015 weETH
Scenario 1: No Currency Conversion - Deposit YT-eETH, Receive YT-eETH
Example Scenario: YT-eETH-26Sep24 price movements during 27 day period
What happens in this scenario?
TLDR: deposit YT-eETH-26Sep24, receive YT-eETH-26Sep24
YT-eETH-26Sep24 price on Day 1 is 0.0015 weETH and ends on Day 27 at 0.0013 weETH which is below the strike price of 0.00135 weETH (90% of Day 1 price)
Thus the vault trade expires and no currency conversion occurs. The full principal that was deposited by the user is returned (100 YT-eETH-26Sep24). The user earns 1.15% yield paid in YT-eETH-26Sep24 (same currency as deposit)
Deposit and yield are automatically reinvested for compounding returns into a new 27-day vault
What is the payoff for the investor?
Initial deposit = 100 YT-eETH-26Sep24
Deposit returned = 100 YT-eETH-26Sep24
Yield earned = 1.15 YT-eETH-26Sep24
APY = 16.63%, single 27-day vault yield = 1.15%
Total payoff = 101.15 YT-eETH-26Sep24 after 27 days (deposit + yield)
Scenario 2: Currency Conversion - Deposit YT-eETH, Receive weETH
Example Scenario: YT-eETH-26Sep24 price movements during 27 day period
What happens in this scenario?
TLDR: deposit YT-eETH-26Sep24, receive weETH.
YT-eETH-26Sep24 price starts at 0.0015 weETH and ends on Day 27 at 0.0016 weETH, above the strike price of 0.00135 weETH. This results in a 'conversion'.
A conversion occurs, whereby the deposited YT-eETH-26Sep24 is automatically sold for weETH (at the 'strike price').
The user also earns 1.15% yield, which is paid in the same currency (weETH).
What is the payoff for the investor?
Initial deposit = 100 YT-eETH-26Sep24
Deposit returned = .135 weETH
100 YT-eETH-Sep24 sold for weETH @0.00135
Yield earned = 0.0015525 weETH
APY = 16.63%, single 27-day vault yield = 1.15%
Total payoff = 0.1365525 weETH after 27 days (deposit + yield)
Scenario 3: Price Moves Above Strike During Trade - No Conversion
Example Scenario: YT-eETH-26Sep24 price movements during 27 day period
What happens in this scenario?
TLDR: deposit YT-eETH-26Sep24, receive YT-eETH-26Sep24.
YT-eETH-26Sep24 price on Day 1 is 0.0015 weETH and moves above the strike price (0.00135 weETH) on multiple occasions. However, the price at expiry ends below the strike price.
No conversion occurs because the payoff is calculated based on the prices at expiry of the 27-day vault.
The full principal that was deposited by the user is returned to them (100 YT-eETH-26Sep24). This is automatically reinvested into the next vault.
The user also earns 1.15% yield, which is paid in the deposit currency (yt-eETH-26Sep24).
What is the payoff for the investor?
Initial deposit = 100 YT-eETH-26Sep24
Deposit returned = 1.15 YT-eETH-26Sep24
Yield earned = 1.15 YT-eETH-26Sep24
APY = 16.63%, single 27-day vault yield = 1.15%
Total payoff = 101.15 YT-eETH-26Sep24 after 27 days (deposit + yield)
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