EP.28 [EN] - TN Lee: An DeFi Veteran on Pendle's New Quest of Yield Tokenization / 一位 DeFi 老兵谈Pendle的收益通证化
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Hello and welcome everyone. I'm Mabel Jiang, the host of 51%, a podcast series presented by Multicoin Capital. This show is the exploration of blockchain's rapid development across Asia with a particular focus on the perspectives, communities, and operators based in China. My goal is to bring Eastern perspective to West and Western perspective to East so you can better understand the crypto's unique market structure and how these distinct communities think and operate.

This podcast will feature a mix of English and Chinese discussions. The language you're hearing now will be the language I use for the rest of the podcast. Stay up to date with my latest episode by subscribing to this podcast. Thank you for listening.

Mabel Jang is a principal at Multiquin Capital. All opinions expressed by Mabel or other podcast guests are solely their opinion and do not represent the opinions of Multiquin Capital in any way. This podcast is for informational purposes only and should not be construed as an inducement to make an investment or relied upon as investment advice. Multiquin Capital may at times hold positions in some of the tokens or companies discussed on this show.

Hello everyone, welcome back to 51% podcast. I'm your host, Mabel Zhang. Today, we are really excited to have the co-founder of Pendle Onions, Tian Li, to join us. Hi, Tian. Hi, everyone. Yeah, and thanks, Mabel, for having me.

Of course. Before we jump into the discussion of Pendle and all the DeFi related stuff, do you want to introduce your background as a serial entrepreneur? How did you get into crypto and what companies did you co-found work as a part of the leadership team in the past? Yeah, sure. So my background in crypto actually started when I joined Kyber as a founding team member back in 2017.

So I mostly led the business development unit and overseeing the marketing and community aspects as well for the company. So I stayed on at Kyber up until the end of 2018, after which I gathered a group of people who are now working with me at Pendle to start a company and work on numerous projects together.

I remember one of the earlier projects that we did together was to develop a mining software for people to mine privacy coins using FPGA. And subsequently, because of the market environment back in 2019, we weren't able to make a sustainable operation out of our mining software development. And we pivoted to provide

engineering services to different layer ones. So we had a little breakthrough over there. And that was also when we got to know a lot more about the different ecosystems that exist in the blockchain space. So among the companies that we've worked with include Tezos, IoTeX, Band Protocol, Stellar. And that became a foundation for us to understand the crypto at a deeper level, which was very important for us when we founded

I'm curious though, because you kind of just went over the Kyber experience very lightly. How did you discover Kyber at that point and why did it attract you?

So actually, the reason why I started at Kyber was mainly because of the friendship that I had with Loy. So by then, when I joined Kyber, I've already known Loy for a couple of years. My first interaction with Loy, I remember, was when I was still trying to figure out what Ethereum was. And I saw that this guy at National University of Singapore,

published a paper called Oyante and he seemed like one of the few people in Singapore who knew about Ethereum and crypto altogether. And I realized that he was only two bus stops away from where I was and I reached out to him. So we chatted and we became friends. So we would catch up pretty frequently back then. And when he had the idea of building Ethereum,

Kyber which was a decentralized exchange back then I thought it was very very innovative and that got me interested in joining crypto full-time so I think without Kyber I wouldn't have a chance upon so many wonderful people who also helped me with the entire construction of Pendle. That makes sense. Yeah, so what is Pendle exactly? How does that work?

So Pendle is a protocol that enables the training and hedging of yield. And the trading of yield occurs on our AMM that is designed for assets that are time dependent. So one of the things is that, you know, currently users have limited options for utilizing the yield beyond simply monitoring the APYs. And we look to allow users more optionality on this front by providing control.

So beyond fixing yield, a very strong feature that we enable at Pendle is for traders to take leverage long positions on yield if they have a certain market outlook. And I think this is potentially game changing because currently there is no way to gain pure yield exposure. So today, if a user wants to gain yield exposure, the user pretty much has to

stake an asset to gain yield whether on farms or vaults or lending platforms, right? So with Pendool, users can simply buy the yield token to gain yield exposure without having to care about the underlying. And the ability to do this without taking the underlying asset is a huge improvement in capital efficiency and can potentially provide leverage of a few multiples with the same amount of collateral. Yeah, so...

If I can just help you understand a bit more of the user experience, right? I think to begin with, the user will have to have the yield bearing assets such as the A tokens or C tokens from Aave and Compound. And upon acquiring these assets, they can come to Pendle to deposit the A tokens or C tokens to mint yield token and ownership token. So denominated in YT and OT.

So the Yield token represents the right to receive the future yield, while the Ownership token represents the ownership of the Yield-bearing token. And of course, after minting these assets, there are two potential follow-up actions for a Yield token holder. So the user can either sell the Yield tokens on Pendle AMF to immediately collect a payment,

And we refer to this as fixing the yield because this action allows the user to receive payment upfront and thus locking in their yield.

Alternatively, the user can also use that yield token and pair it with a base pair like USDC to provide liquidity into the Pendle AMM to earn the trading fees and incentives. And very importantly, as we were designing the platform, we've intended for the experience of Pendle AMM to be extremely similar to Uniswap or SushiSwap to minimize the learning curve. So this is mostly from the perspective of

the Yield Token holder. And of course, on the flip side, any user can purchase the Yield Token to gain exposure. And this allows them to speculate on the interest rate in a very capital efficient manner. Got it. Yeah, that makes sense. I think the AMM part was actually...

quite easy for onboard people indeed. So coming to this, I actually wanted to compare in parallel Pendle with some of the other peers that were also working on the same category of what you guys are working on. So there are a few of them. I'm not going to discuss anything related to the zero coupon bond, which I guess Notion was one of them.

And I think there are some other ones that are also focusing on 0.1. But more or less, I think PENDO is more similar to Element, PHY, and then SWIVL as well. So what are some of the differentiation? Because I think discussing the differences and commonalities of these protocols may help our audience also understand how PENDO stands out a little bit better as well.

Yeah, absolutely. So I'll try to answer this question succinctly by focusing on a few core points on our design. And so firstly, Pendle builds an AMM to enable the yield trading, Uniswap one click style. And we believe that the ability of AMMs to pull the liquidity is extremely important because having everything on chain allows us to leverage on the flexibility of on chain liquidity and add to the composability of the protocol.

so i think this contrast to suitable as they've taken the 0x approach to build an order book system and the next point in regards to the design right is is the focus on the assets so our design is intended to to be suitable for all sorts of yield bearing tokens not just the lending and borrowing

yield-bearing assets like the Aave or Compound A tokens and C tokens. Now, but of course, we will start by supporting the most prominent lending platforms as mentioned, but it can get pretty interesting further down the road, right? When we support yield-bearing tokens such as harvest FSS or interest-bearing synthetics and even LP tokens from incumbent AMMs like Uniswap or Sushiswap. And I think when that happens, we're essentially allowing people to speculate and hedge on farming

and LP pool yields. So we've tried not to be confined to just the lending borrowing platforms, but we want to generalize it such that we can support yield bearing assets of different types.

Now, that being said, I think many have compared Pendle with Element, and I personally think very highly of the Element team, right? So even though it seems like there are a lot of similarities in some of our scopes, I think we are quite different in terms of the design and the approach towards the entire yield market. And generally speaking,

They focus on the utilization of the principal component of a yield-bearing asset, while Pendle focuses on the yield component. So if you remember, a yield-bearing asset is comprised of mainly two parts. There's the principal aspect and there's also the yield aspect. So each of us, as a protocol, we focus on the different aspects. So we've actually spoken with Element Finance and we think that

you know given the differences in the areas of focus right there are possible synergies that we can explore in the future i was waiting to hear you to expand on that a little bit more but um if that's where you want to end it's fine too um because i think um yeah like do you think you can expand a little bit more on you know what exactly the i guess focuses and differences of element and you guys and then how you guys can collaborate with each other

Yeah, so I will just try to keep it very high level, right? But because right now, I think Element Finance focuses on the principal aspect of the yield-bearing asset, while Pendle focuses on the yield aspect of the yield-bearing asset. And Pendle has constructed the entire platform and the AMM to cater to yield tokens. In a way, I think...

perhaps there is a potential opportunity for yield tokens from different platforms and avenues to be traded on Pendle AMM. And in a similar manner, because Pendle AMM does not have markets for the principal tokens or the ownership token in our case,

whatever element produces could potentially be a venue for the training of OTs. Yeah, I think your point about yield is quite interesting and actually quite on point because I think more and more frequently you'll see a lot of people discussing about how they are

not very convinced that high yield on Ethereum DeFi was sustainable and thus here comes a lot of interest rate related products, the interest rate derivatives, and then people can trade these instead of only purely being high yield seeking. So I thought that was actually a pretty interesting kind of focus for Pendle for sure. So related to that, there are

Obviously, since back in the days when Kyber, when Bancor was working on DeFi, that was mostly related to the primary or more primitive protocols like lending and trading all the way up to today. We have a lot more of these derivatives kind of products on the DeFi stacks. So what are some of the missing pieces that you've been seeing?

um or some of the trends that you've been observing in these more sophisticated d5 sacks and then how are these trends related to the long long-term vision of pendle so i think personally i i feel that i think the focus

on under collateralized loans is going to be one of the more important narratives in DeFi this year. And we're starting to see projects like Taylor and Maple Finance. And of course, like there are a few others coming out with solutions to address this segment of the market, right? Because after all, for the longest time in DeFi, we have been tolerating inefficient capital, sorry, just inefficiencies.

So, like, for example, if we want to borrow like $1, we have to put up maybe $1.5 as collateral. And this is an aspect that I think can be improved on. So I don't know how this thing will...

roll out because a lot of these products are still very new to the market. But I'll be very interested in seeing how these products could improve capital efficiency, which is likely going to allow for newer types of innovations to happen in the DeFi ecosystem.

And the other aspect that I feel very strongly about is the cross-chain narrative. Because, you know, personally, when I started out at Kyber in 2017, I think cross-chain has been something that's talked about back then. But it's taken us a while to construct the underlying foundation to get to where

where we are today, I think cross-chain is essential because again, if we look at it from various ecosystem perspective, there's still a lot of money that is trapped within an ecosystem. Like for example, there is a big ecosystem out there, probably on Terra or Solana, but without the ability to allow for a more seamless way to transfer the liquidity from an ecosystem to another,

I think there are still a lot of liquidity that's trapped. So if I wouldn't say if, right, but I think it's just a matter of when it's a matter of when, because I think a lot of very bright people and projects are already working on this particular problem statement. And we're probably not too far from seeing something functional in the next few months or so.

And this is something that we believe very strongly at Pendle as well, because I think Pendle, as much as possible, should be chain agnostic. And we want to be able to allow for the trading of yield across multiple different fronts, not just on Ethereum, even though we're starting out on Ethereum. So the arrival of all these solutions could allow us to scale more aggressively further down.

whenever the infrastructure and the TVL on the different chains make sense. So this is how I think about it. I generally feel that if there is a possibility for us to port over, deploy or leverage on liquidity from other ecosystems, that would be a significant improvement from where we are at this point in time.

Talking about that, I guess like, you know, combining the two points that you've made, the first one was improving capital efficiency, and then second was cross-chain narrative or cross-chain in general capability. How are you seeing Pendle getting on some other chains that are not, you know, more or less not constrained by the performance? Do you still think AMM would be a...

the right choice because obviously AMM is good for a lot of reasons. But at the same time, it's also sacrificing more or less some of the capital efficiency as well. I'm not sure if you have thought about this, but I'm just curious.

Yeah, I've thought about this. But truthfully, I don't know enough. Because I think the approach that we're undertaking at Pendle is to build something that would make sense for the bigger ecosystem at this point in time. So yeah, of course, let's say if there are other chains or ecosystems that are not constrained by these limitations that we're seeing,

on Ethereum, there is a possibility that we might consider a different approach to how we want to allow for the yield trading. So I would just say, right, there's no cookie cutter here because AMM suits us in the given context because we believe that it is important for us to be able to pull liquidity and leverage on the flexibility of on-chain liquidity.

So if there are better ways to do it on other chains, then I think we should not be confined to just our current approach of employing AMM for the trading of yield tokens. But instead, we should just try to keep an open mind and do whatever seems fit for the given ecosystem.

Yep. Yeah, I guess like for even for Ethereum, the mainnet is coming live. Pendle mainnet is coming live very soon, right? I'd be curious to see how people are using it. So I guess like from your perspective, you guys probably have also kind of planned out some of the potential use cases, how people are going to use Pendle for in advance. Can you share some of those

scenarios / use cases? Yeah, so I think the base use case for Pendle is for users to trade and hedge the yield based on their risk appetites. So I think generally we can look at it from two perspectives, right? The buying and the selling as base cases. So sellers of the yield token can lock in their current rates for upfront cash.

essentially swapping their floating interest rate for a fixed one. So just to give you a bit of context, right? Most of the platforms that offer interest are offering floating interest. So if you deposit funds on votes like Harvest or Yearn or depositing like stable coins or other forms of assets on lending platforms like Aave Compound, you're commonly getting floating rates. So what Pendle allows for is for

the lenders on lending platforms and the participants of folds to lock in their rates by selling away their yield tokens for upfront cash. So in this way, they can earn their future income immediately and this cash can be channeled elsewhere for more productive use. So alternatively, the buyers of yield tokens can gain yield exposure without having to purchase or stake the core underlying asset.

So in this case, if a user wants to get exposure to, for example, lending rate on Aave, instead of depositing USDC onto Aave just to get the AUSDC and be exposed to the interest rate, right? They can buy over the yield tokens of AUSDC from Pendle and get the exposure without having to

deposit funds into Aave in the first place and and i think that this can be a very powerful form of leverage right without liquidation risk and this this option is currently unavailable so and i think more importantly it allows for the buyers to speculate freely on interest rate in a more capital efficient manner yeah so um yeah the other part is i i think is the another use case would be

for sellers, sorry, not sellers, but the minters of yield tokens, right? So the minters of yield tokens can also be exposed to additional yield on top of what they're already getting from the base protocol. Like, for example, if I already have

usdc deposited into ave i will subject to ausdc which entitles me to some interest rate now i can take this ausdc and park it into pendle to mint the yield token and then pair it with another base pair and then contributing it to to the amms lp to get additional yield so for for people who are interested in

getting more yield, Pendle AMM could be an avenue for them to consider. So actually I have a follow-up question on the actual construction of Pendle that I should have actually asked earlier, but I'd like to follow up here regardless.

So for someone, let's say, I would assume you guys are rolling over, meaning like whoever starts, say 30 day, like someone who wants to have a fixed term of 30 days. If I start today versus for someone else started in 30 days, sorry, three days later, 40.

it should all work for us. So like, you know, for both of us, it's going to end within 30 days instead of like everyone ends the same day. And then, you know, some people have shorter period of time versus like the person who started on the first point, like we'll have the total full of 30 days. So for this kind of construction, how do you guys realize that?

We basically wanted for the tokens to be fungible. And if we have numerous different expiries, then it would result in greater liquidity fragmentation and tokens would not be fungible. So for us, because we were very aware of the liquidity fragmentation issue, we think that it makes more sense for us to standardize the tokens

expiry date and allow people the freedom to go in and out prior to the expiry date and to either change ownership buy yourself the yield tokens so comparatively right if we were to allow a fixed term basically just giving people the liberty to set their expiry dates

it could mean a strain on the existing liquidity. But again, this is not to say that it's not possible, right? It's mainly because right now, when we're introducing Pendle to the market for the first time, we don't have enough data points to know what's right and what's wrong. And a lot of times, we have to implement something, gather the data points, and then continue to iterate the product offerings. So we're starting with

Our version of implementation, because we thought about that liquidity fragmentation issue and we wanted to concentrate liquidity as much as possible so that participants of the AMM could trade the assets or the yield tokens with relatively little slippage. And of course, as we gather more data points, then we can try to see how we can be more flexible about it.

And, you know, come a point where we are comfortable with having more participation in regards to governance from the community, we can make it more permissionless and allow people to set up pools

without having to get any kind of consent from the operating team. Right, so what are some of the challenges that you guys can foresee? Because you haven't really run on the mainnet, so you don't know yet. But if you try to imagine what could be some of the challenges you get people to use Pendle? I think one of the bigger challenges has got to be the user experience because

In my opinion, I think yield trading is still a reasonably complex product, especially for users without any financial background or any understanding of derivatives. So in order to overcome or at least alleviate this potential challenge that we foresee, we will be approaching it in two directions. So the first aspect is to invest in education.

Basically to build up the understanding of what the product is as well as the product proposition. And then secondly, we are looking to simplify the user experience such that we can abstract away the complexities involved and the steps involved for users to participate in the Pendle protocol. So just to give an example, right? In the near term, as a product, we're looking to focus on

abstracting away the steps in false through the use of a single click wrapper. So basically,

If I can just run through the current, like the primitive version of the user experience, right? A user will first have to interact with Aavea compound, get the yield bearing asset and then take it on to Pendle, deposit it to mint the yield tokens and then sell it on the AMF just to be able to lock in the rates. So these are multiple steps across different platforms. And in order to improve the user experience,

we'll have to take care of all these different steps. And what we can do is to basically automate some of these things, right? So a user, instead of having to interact with Aave to get the yield-bearing asset and then come to Pendle, what we can do is to allow for the user to deposit USDC or other kind of assets directly onto Pendle, and then Pendle will route it to other integrated platforms

Obtain the yield bearing asset and then mint the yield tokens and sell the yield tokens onto the AMM to lock in the rates on behalf of the user. All of these steps abstracted away from the users. And I think when we have that, we could offer this as a feature to wallet interfaces like maybe like high-end token or Dbank or Zephyr.

and allow users a more seamless way to access decentralized fixed-rig product. So this would be how I perceive it. So basically, just getting people more familiarized with what Pendle offers through engagement with communities and the release of materials. And then simplifying the user experience would be another major step that we have to undertake in order for us to improve the adoption.

So for someone as a retail who deposit their money to you guys, do you guys say accumulate a bunch of them and then put them together at once into say Aave or do you do it one by one? Because I guess if it's doing one for every single time, like it will be pretty gas intensive for...

for these retail users, right? Like you'll have to execute all these things and route back for them. How are you guys solving this? So from the way we're thinking about it, we'll likely go ahead with a more expensive route of individualizing the transactions. Again, we have not really looked too deeply into this aspect, but from a user perspective, the individualization of

the abstraction and the deficit of funds would be most straightforward because they don't have to wait for a pool of funds to be collected before they can obtain something like their LP tokens. If they were to do it in a single transaction and all of it taken care of by the smart contracts,

with an expected outcome, I think it would make more sense from a user experience perspective. Have you guys considered any Layer 2s then? We are monitoring the Layer 2s closely, but I think right now we do not yet have a concrete idea on which part, sorry, which chain or the Layer 2 solutions to deploy and what.

Interesting. I think, I mean, right now the gas is actually pretty low. So probably it's a good time for Farpendo to launch actually. One thing that I've been thinking about recently, going back to what I commented earlier about, so over the weekend, there was a friend,

who commented that he is not or no longer as bullish for Ethereum for the near term being because he just doesn't think the yield is going to be sustainable on ETH5. But then, so if the capital can no longer achieve those high yields, then they cannot really stay. But then I counter with the argument that

So I look at these rates product people, of course, like they, you know, the yield may not be able to really sustain forever, but people can speculate on the rate products. I'm curious, like how you are thinking about this. So I think generally as the market becomes more efficient, right, we will likely see a lowering rate from all these different yield avenues. But

it also means that there are probably better avenues for people to speculate on all these different forms of yield because um there there there's probably greater clarity uh in in in the expected yield through the construction of yield curves so it's it's really hard to say um

But I would think that as the ecosystem matures, we will probably see, by mature, I mean more different types of products to support rate speculation. We will likely see an increased activity in this particular aspect. Yeah, that's for sure. I was just thinking that I think the rate product, I mean, as long as the rates are volatile or had some sort of

volatility and people there will always be people who instead of built like betting on the high high APY they instead like you know really bet on the volatility of it and then obviously it will need higher like larger amount of capital to really make some significant amount of money so I actually think it's a better way for the capital to get in that was kind of how I took

Yeah, so I actually like to switch gears a little bit, talk about your entrepreneurship experience because you are a serial entrepreneur. So what are some of the most important things that you learned from the past experiences? Like anything that new startup founders can learn from your experience? Yeah, so I've actually...

I have one and it took me a while to recognize this thing. So, you know, generally, I think crypto is a very fast moving industry, largely driven by the fact that it is very global and there are many smart people constantly innovating on the technology. Now, a startup in a fast moving industry is constantly bombarded with many different unknowns.

And it is our job as core members of the team to identify solutions for the things that we don't know. And the fact that we can't know everything because we don't have enough hours is sometimes a limitation, right? But then again, because we don't have that much time to look at the problems and come up with solutions,

we have to try to think of ways for us to overcome some of these challenges. And over time, I've learned that the skill here is to short circuit the learning without compromising on the essence. And to do that, we have to go to the definite source, sorry, definitive source and learn about the topic. And you'll find that if you learn from the right source, you don't have to read any other sources. I'll give you an example.

When it comes to management, a lot of people actually recommend reading high output management by Andy Grove, right? And I think it turns out after reading high output management, I don't have to read 10 other management books because I just have to read it from the expert, right? So what I've learned to do is to seek out the experts and learn from their experience and observation. And this is why I reach out to...

to you in the past to ask about things in general because i value your thoughts and opinions on all things crypto and then drawing from our experience in product design i remember reaching out to tntn quite frequently to ask about the way we could position the product and and truthfully he's helped us in a big way with our product positioning especially during the formative days

So, and you know, like, very importantly, I think in line with this idea of seeking out the experts, we have to be shameless. Because I think that a lot of people will help, will only help if you ask a question. And my belief is that many people are willing to share. So it is up to us to have the courage and the willingness to ask people and seek knowledge. How about...

How about some of the takeaways like managing teams or keeping the operation? Right. So ultimately, I think it really boils down to alignment of interests and the management of expectations. I think as a team lead, the challenge here is really to try to challenge the team to

to do bigger and to obtain more ambitious goals and to attain bigger objectives. So making sure that we have sufficient communication between team members and outlining the roadmap and the directions in the longer term is a way that I've adopted to keep the team in sync on our common goal.

And I think separately, just having great people on board has helped us with the management significantly as well. Because throughout my experience as various project leads, I think what makes or breaks a project is fundamentally the people. So if we are able to craft the hiring process well and we onboard a group of people,

who are talented and skilled and have the willingness to learn, we will likely onboard capable people who could tell us what to do. And I think usually from my observation, when we have one of these team members in the team, they will likely attract very capable people to also join the team as well because other very capable people are...

more trusting towards someone of the same caliber. And I think that's, that's really one of the things that I, that I would really try to emphasize a lot more on. So, because, because when you put a group of smart people together and allow them the freedom to challenge each other and debate about things, usually the outcome is quite positive. And, and,

Because of the peer pressure and also the common objective to achieve something great, right? There's some idea of self-management over there. And generally, it will kind of work out.

Yeah, well, this is like an easy thing, easier to say than to be done, to be honest. Finding the great talent is always the hardest and making sure all of them work well together is even harder. Yeah, I would agree with you, right? Because I've actually spent a lot of time just to identify

possible avenues for us to explore in order to onboard good talents. And to a large extent, I've invested a lot of my time and resources to build up relationships with schools and different societies just to be able to access the talent pool. So this is actually the harder part. Once we onboard them and we tell them and help them understand the bigger vision of what we try to do, many of them will

will appreciate the, at least from a panel's perspective, right? I think a lot of the people that we've onboarded, they appreciate what we do and they are, and when the incentive is aligned, I think it's not that difficult for us to get the buy-in from these people. For sure. So what are

Well, I mean, one of the other thing that I'm curious, like how you kind of align your team members is the longer term vision in terms of what Pendle can do. Obviously, right now you guys are focusing on the on-chain yield. I remember you also mentioned something along

generally tokenizing yields for not just DeFi protocol but also some of the other staking derivatives. Can you expand a little bit more on that? Yeah, so I think this has got to do with how we were trying to build up the longer term roadmap, right? And I think the bigger potential here is that we will likely see

More sophisticated financial products emerge in the DeFi space over the course of the next few months or the next few years. Because this is likely a natural progression for the space. And for that, I think the opportunity for Pendle here is to generalize the AMM to accommodate different forms of financial products

and make Pendle the venue for the secondary markets of these assets. Because I think what we have with Pendle right now is an AMM for assets with time decay.

So there are like with a lot of these financial instruments, right? They will likely have time element in the token. So generally what it means is that like because currently a lot of the ERC20 tokens, they can exist in perpetuity, right? There's no lifespan at all. But in the case of something like a financial product, the value

will usually decay with time because the token itself usually indicates some other form of utility. So like in the case of Yield Token, the reason why it has a lifespan is because it indicates the yield that is accrued to the underlying that is locked up on Pendle. So with time, it introduces some complexity to the nature of the token.

And for that, right, because when we introduce time to the token, it will result in a lifespan in the token. And as the token mature or expire, it becomes worthless. So with a lot of these financial instruments that will likely emerge in the next couple of months, I would think that they will also share the same kind of trait in that the tokens will have a lifespan. And because of the lifespan,

the value of the token will decay as time passes. So these kind of assets will unlikely be... I think these kind of assets will not be as efficiently traded on incumbent AMM because the incumbent AMMs like SushiSwap or Uniswap, they don't account for time in the token.

So I think this is an opportunity for Pendle to grow further down, right? Because if we're able to generalize the Pendle AMM to accommodate different forms of assets that are also time sensitive, then I think we can allow for more different types of assets to be traded on.

This is super well said, actually. I do realize as well that most of these financial instruments right now exist in DeFi space is primarily perpetual or assumed perpetual. Time is absolutely a very important aspect of this. And then the value of that should be accounted as well within how you value an asset. So I think this is super well said.

And I think that kind of a general or abstract, like how we think of yields and assets in general, financial assets in general, in the space. Right. So I'd like to switch gear a little bit, talk about where you are. You and the team are in Singapore, which obviously we all know a lot of people have moved over to Singapore recently in the past six to 12 months.

As a builder there, how do you feel about being in Singapore and the edge? So I think you're right to say that Singapore is becoming more of a crypto hub in the region. So I think the good thing about being in Singapore is that access to capital is becoming more abundant. So as a project, when you're starting out, you can always... It's probably easier for you to reach out to funds and pitch the idea to...

to get maybe some seed funding. And I think people are opening up to the idea of investing in DeFi projects, right? So it's not as... It wouldn't take a lot of effort to convince people about some of the use cases that we're seeing right now. And of course, as the local ecosystem gradually develops, we will likely...

have the benefit of partnering with some of the projects here. So I think we will likely benefit from it will be more straightforward for us to partner up with projects in the same ecosystem as compared to

startups or founders in neighboring countries in which the ecosystem is not as developed. But having that said, I think what I'm seeing right now in Singapore is that it's becoming quite difficult to acquire talent because there are so many projects crawling in a small island of five and a half million people.

So even though there are a lot of projects in the same ecosystem, we're all fighting for the same pool of people. And it's a very, very small pool of people. And this is not just confined to crypto companies. We are fighting for talent against the tech giants like Facebook and Google and the top-notch trading shops like Sharp and J Street. And these companies have every means and ability to pay the people well. So we have to approach the talent acquisition very differently. And it forces us

as a project to be creative about our approach. Yeah, you point out a very interesting point. Actually, a lot of entrepreneurs on the ground of China, although China is like a big country, but it's very hard for many of the teams here in Hangzhou where I am or for people in Beijing to acquire talents. I think Shanghai is slightly better.

I think we are at a stage where a lot of these crypto protocols, like they want people who can code more than just Solidity. And then obviously there are some supply of the talents who can code Ruts or Java or whatever those, but you're essentially fighting those against the bigger shops, like whatever the tech giants in Beijing. But then if you're looking crypto natively,

there's always limited number of good solidity coders and whatever. And then usually those are highly sought after. So I think that's actually pretty interesting. I actually think this is like a more or less, I wouldn't say global phenomena, but definitely more for Asia, because I feel like for Silicon Valley, it seems to be slightly better. And even in Germany, I think it's also pretty fine. But I think that's kind of just like a paradigm shift that we are going through in Asia.

Yeah, so coming to the end of the podcast, I'd like to end with an interesting question. I know you really like reading. Who is your favorite crypto writer? Why? So for me, I think very highly of Arthur Hayes. And I almost always look forward to his biweekly essays. And mostly because I think there's a lot of wisdom in his essays and there's a lot to learn.

especially for someone who is still trying to figure out the bigger financial market. But I think more importantly, the reason why I am more attached to Arthur Hayes as compared to many other good writers in the space is because there is a very personal element to Arthur Hayes' approach. And for me, Arthur Hayes has been an inspiring figure.

And this is maybe a little anecdote that I can share. Because when in 2019, when we started out the business, we were still trying to figure out a direction for what we're doing. This is way before Pendle was even started. So because we didn't have a definite, a definitive direction for us, you know, as a team.

We were trying out many different approaches and we were trying to venture into many different industries and sectors. We were not doing, I mean, we were largely involved in crypto, but we were also exploring avenues in energy space and AI and other emerging technology markets. So, you know, at some point in time, after trying out so many different avenues without much success,

it's very easy to want to it's very easy to entertain the idea of giving up but somehow i trust upon this little story about bitmex's early days and it says that when bitmex started out um and in 2016 right there were days when they had no trading volume right not not even like a hundred dollars it was zero dollar

And that, in a way, it was inspiring because the Arthur Hayes that we see today is probably quite flamboyant. And with BitMEX, there was a lot of successes. But maybe a lot of people didn't realize that they had to go through a very difficult phase and Arthur Hayes and his team had to fly to different countries in the region to pitch for the idea and acquire seed fundings through various tournaments and competitions.

I thought that was a pretty inspiring story because it helped me get through the process. Because I feel that if we are smart about things and we try hard enough, we will be able to find a way out. And this has been something that I feel strongly about. So I think his experience...

I've benefited from his experience and without that little anecdote, maybe I would have given up earlier or easier and then that wouldn't be handled. That's super exciting. Actually, I was going to say I had a thought over the past 12 months that I think in crypto, we are still in a phase where

I believe if you want, if you cannot do something or fail to achieve something, that's probably because you just don't want it enough. I know like this might be a little bit exaggerating, but it seems like you agree with that as well. I do think so. I think the good thing about crypto is that it is a unique force that liberates opportunities for people

who might not have had the access otherwise, right? So yeah, if you really want enough, if you really want to achieve something, I think there are a lot of very helpful people who could guide you. And, you know, like from my personal experience, I think people are very, very willing to share. It's really up to us to reach out and ask for help. So if we wanted enough, we will do all of these things. And then if we try enough, we will know enough of the

directions that wouldn't work and eventually we'll come to something that could work yep thank you so much for for joining this episode this is actually a very good place to end and i really enjoyed the conversation thank you yeah likewise thanks a lot for having me of course all right thank you for listening in