Hey Edge readers,

As Bitcoin pushes towards new all-time highs, BTCfi is shaping up to be one of the hottest narratives in crypto. Imagine turning your Bitcoin from a dormant store of value into a yield-generating asset. Pendle, a yield trading platform we are launching this week, is already making this a reality, enabling users to trade potential BTCfi yield by betting on their preferred tokens.

In today’s edition:

• Betting on BTCfi with Pendle 🟠

  Maximize your BTC yields in the Babylon points race.

• New investable pool: Pendle SolvBTC.BBN ✨

  Earn up to 10% APY on your BTC directly on Exponential.fi.

• Kraken announces Ink chain 🐙🖋️

  Plus: Bitcoin ETF demand hits a 6-month high, Uniswap integrates with Across for cross-chain swaps, and more.

Stay sharp. 🫡

-The Exponential team

Betting on BTCfi with Pendle

Ready to place your bets in the BTCfi horse race? 🏇 🏁

The race for Babylon points

Babylon is a staking protocol that enables Bitcoin holders to natively earn yield on their BTC by securing Proof-of-Stake (PoS) networks. It recently started its mainnet launch, igniting a competition among Bitcoin Liquid Staking Tokens (LSTs) to secure coveted Babylon points, which will likely lead to a future airdrop.

Babylon is launching with incremental deposit caps to ensure everything goes smoothly before fully opening to the public. The second deposit capital ended with the current lineup of LST “horses”:

1. Lombard LBTC: 7,166 BTC (30% of total BTC staked)

2. SolvBTC.BBN: 7,089 BTC (29.7%)

3. Bedrock uniBTC: 2,148 BTC (9%)

4. PumpBTC: 2,077 BTC (8.7%)

With a total of 23,891 BTC staked, each token is competing to earn more Babylon points. By choosing the right LST, you could maximize your potential airdrop rewards from Babylon. So far, Solv and Lombard have taken the top spots, each holding ~30% of total Babylon points.

Maximize potential yield with YT or earn fixed yield with PT

Pendle is a DeFi protocol that allows users to tokenize and trade future yields of their assets. For those new to DeFi, Pendle lets you separate the yield (interest) from your yield-generating assets, enabling you to hedge against or profit on future expectations of an asset’s yield.

When you deposit a yield-generating asset like SolvBTC.BBN into Pendle, it splits into two tokens with a fixed maturity date:

• Principal Token (PT): Represents the underlying asset’s value, redeemable 1:1 at maturity. Think of PT as zero-coupon bonds.

• Yield Token (YT): Represents the future yield from the asset. YT’s value can fluctuate but always trends to 0 at maturity.

Degen bet (choose YT): By holding YT of your chosen LST, you’re effectively betting on that token to dominate Babylon’s staking race. If your LST increases its share of BTC staked, demand for its YT rises, boosting your returns and earning you more Babylon points. You profit when the total yield plus airdrop rewards collected ends up being higher than the cost of purchasing the YT.

Safe bet (choose PT): If speculating isn’t your style, opt for PT to secure fixed returns. PTs provide fixed yields, redeemable 1:1 at maturity, without worrying about market and staking dynamics. You always profit as long as you hold to maturity as you’re essentially buying the asset at a discount.

The foolproof play

What’s the simple, "foolproof" play?

Become a liquidity provider (LP) on Pendle.

As a LP on Pendle (e.g. Pendle SolvBTC.BBN LP), you enable other users to trade in and out of PT and YT tokens. A liquidity pool on Pendle consists of PT and a wrapped version of the underlying yield-generating asset. By providing liquidity, you earn yields from multiple sources including swap fees, fixed return from PT maturing, native yield of the asset, and protocol incentives (paid in PENDLE token).

The native yield of the underlying asset also includes points from Babylon and the respective LST protocols. This means you can earn a yield on BTC while retaining some upside exposure to future airdrops. It’s a win-win!

TL;DR: Providing liquidity on Pendle lets you earn yield on BTC (up to 10% APY), plus accumulate Babylon points, LST points and more. Even if the points end up being worthless, you’d still earn a competitive yield on your capital.

If you prefer a hands-off approach, investing in the SolvBTC.BBN LP through Exponential.fi is straightforward. Simply fund your account, invest in the pool, and watch your BTC grow at a competitive rate—all without the hassle of managing gas fees, bridging and multiple platforms.

See our post for the full breakdown👇

In the news

• Kraken to launch Layer 2 chain, Ink, on the OP Superchain in early 2025 - Read

• Lido users can now launch validators with just a 2.4 ETH bond versus the 32 ETH typically required - Read

• Ethereum’s next upgrade, The Verge, will look to enable nodes on everyday devices like smartphones - Read

• Maker might be scrapping its rebranding to Sky? - Read

• Bitcoin whales holding >1,000 BTC is nearing its all-time highs - Read

Trending