Abra x Pendle: Optimizing DeFi Yields & Managing Risks for Institutional Investors
Dec, 2023 | Case Study
Ethereum’s Shapella upgrade in April 2023 has contributed to the massive growth in ETH staking — the act of depositing ETH to secure the Ethereum network, earning rewards in return. Correspondingly, there has also been significant growth in liquid staking derivatives (“LSDs”), an instrument which allows users to earn these staking rewards while retaining liquidity of the staked assets.
Pendle is a yield-stripping DeFi protocol, splitting yield-bearing assets into Principal and Yield tokens. This creates a market for fixed and floating rate markets, similar to interest rate swaps (“IRS”) in traditional finance. The IRS market is one of the largest and most essential markets globally for investors to hedge, speculate, and manage risks in the movement of rates/yields.
As part of its continuous effort to expand and diversify its portfolio of yield-generating strategies, Abra has deployed ETH liquidity into Pendle. This deployment has enabled Abra to optimize its ETH portfolio and expand sources of rewards — including the underlying ETH LSD staking yields, the fixed yield portion, share of Pendle swap fees, and PENDLE incentives — while retaining liquidity and managing risks in a transparent and non-custodial manner.
Abra manages over $500M in assets under management in crypto assets on behalf of clients including crypto native firms, corporate treasuries, institutional investors, family offices and qualified investors. Abra generates yield on its client assets via a diversified portfolio of yield-generating strategies — including structured products, lending and DeFi.
Pendle is the largest yield swaps protocol for fixed rates and yield trading in DeFi. Pendle’s adoption as a DeFi primitive has been growing across institutions and protocols to generate more yield, secure fixed yields and directionally trade yield on yield-bearing DeFi assets.
This partnership marks yet another milestone for Pendle in enabling DeFi access to institutional investors. Abra’s deployment into Pendle opens up new use cases and opportunities to its clients, providing the ability to secure fixed rates and to optimize yield on DeFi assets in a fully non-custodial, trustless and transparent manner.
“Pendle has created a next generation DeFi product by constructing a market for both principal and yield tokens” — Bill Barhydt, CEO of Abra.
“By joining forces with Abra, we’re reinforcing our commitment to excellence as we continue to empower institutional players with better yields in DeFi. Together, we pave the way for institutions to navigate this dynamic landscape with confidence and efficiency.” — TN, CEO of Pendle.
About Abra
Abra is a digital assets financial services firm providing corporate advisory, treasury management, lending and OTC trading solutions. Its mission is to help create an open, global financial system. Abra manages over $500M in assets under management, serving crypto native firms, corporate treasuries, institutional investors, family offices and qualified investors.
Investors: AMEX Ventures, Blockchain Capital, Pantera, Arbor
About Pendle
Pendle is the largest yield swaps protocol for term rates and yield trading in DeFi. Pendle’s adoption as a DeFi primitive has been growing across protocols and institutions, allowing access to deterministic yields and to hedge and speculate on yields.
Investors: Binance Labs, Spartan Capital, Hashkey, Crypto.com Capital, DeFi Alliance
