This proposal is authored by Lew Ashby.
To the Mantle Community,
On behalf of the Penpie team, I am submitting this proposal to solicit support from the Mantle community. We believe a mutually beneficial opportunity exists for Mantle to generate yield on its treasury funds by providing liquidity to Penpie.
Overview of Penpie
Penpie is an innovative yield optimization platform, established on the foundation of Pendle Finance. Pendle Finance allows users to divide their yield-bearing assets into Principal (PT) and Yield (YT) tokens, thereby enabling trading on Pendle’s AMM. With more than 25% of the total vePENDLE supply accumulated, Penpie provides enhanced APY options for users, without any token lock-up requirements.
Within just three months, Penpie has accumulated over $45M in TVL across Ethereum, Arbitrum, and BNB Chain, representing 31% of Pendle Finance’s total value locked. Penpie offers a secure and profitable avenue for protocols such as Mantle to earn yield.
We propose that Mantle deposit between $5 million and $10 million worth of assets into Penpie’s Aura StaFirETH -WETH ($1M TVL) pool to acquire 19% APY and Lido stETH($3.7M TVL) pool to earn 12% APYs paid in PENDLE and PNP tokens on Ethereum without locking any PENDLE tokens.
For instance, stETH could be deposited to garner an additional 8-12% yield over Lido’s base yield of approximately 4%. Boasting over $14B in TVL, Lido stands as one of the most prominent protocols in DeFi. This strategy would allow Mantle to generate extra yield on its treasury funds.
By Voting “Yes”, you endorse the following terms:
- Collaboration with Penpie.
- Depositing $5M - $10M worth of WETH to the Penpie Liquidity pools.
1.Mantle will collaborate with Penpie team and decide the exact amount to be deposited on Penpie.
2.Mantle will deposit decided funds to the selected pools on Ethereum and Arbitrum.
This collaboration would showcase Mantle’s support for community-focused DeFi protocols like Penpie. Additionally, it would enable Mantle to generate significant risk-adjusted yield on its idle treasury funds.
In addition to these financial benefits, Mantle would gain exposure and goodwill amongst Penpie’s growing user base. Several major protocols like Frax, Swell Network, GAINS and Ankr have provided liquidity incentives and rewards on Penpie. We welcome the opportunity to establish a long-term partnership with Mantle.
1. Team Background and Transparency:
The project was founded by two individuals who wish to remain anonymous, known only by their aliases, Alan and Grimmace. Alan and Grimmace are no strangers to the blockchain and DeFi industry, holding a vast wealth of experiences that have fueled their innovative and groundbreaking contributions to the sector. As the technical lead, Grimmace is highly active and approachable on discord, ensuring all technical aspects are handled with precision and care. On the other hand, Alan serves as the project lead, focusing primarily on fostering partnerships, driving business development, and overseeing all project workflows.
Team transparency and accessibility remain at the forefront of our values. We ensure that our team is accessible to our community through various channels such as Telegram. Our continued engagement with our community through active social media presence helps foster trust and openness between us and our stakeholders.
2. Security Audit and Measures:
Our protocol has been scrutinised by an extensive security audit conducted by WatchPug. This audit was designed to identify and address potential vulnerabilities, helping to ensure the integrity and security of our platform. The full audit report can be accessed at our Github repository.
To protect our users’ funds, we implement several security measures, including the use of audited smart contracts. These contracts have undergone rigorous checks to ensure they are secure and reliable. Additionally, we make use of multi-signature wallets, adding an extra layer of security to further safeguard users’ funds.
3. Smart Contract Code:
Our smart contract code is open-source and available for public review, demonstrating our commitment to transparency and accountability. You can access and scrutinize our code via our Github repository. As of the present, there have been no major updates or changes to the smart contract code, but rest assured, we always remain proactive in keeping our protocols up-to-date.
4. Insurance and Risk Mitigation:
While we currently do not have specific insurance coverage against potential hacks or exploits, we are in the process of integrating Penpie into our existing insurance protocol, InsurAce. This will give users the option to insure the funds they have deposited into the Penpie protocol, enhancing their protection.
5. Liquidity and Volume:
Penpie currently boasts a Total Value Locked (TVL) of $47.10 million, a strong indicator of our protocol’s trust and popularity within the DeFi community.
6. Tokenomics and Governance:
Our native token, PNP, serves as the governance token of Penpie, driving the decision-making process and generating value. Users can lock their PNP tokens on Penpie to receive vlPNP at a 1:1 ratio. vlPNP, the locked version of the PNP token, allows PNP holders to earn passive income and participate in the governance of both Pendle Finance & Penpie.
In our governance structure, the voting power held by Penpie through holding vePENDLE is distributed among vlPNP holders. This enables PNP holders to participate in Pendle Finance’s governance cost-effectively and earn revenue share from Penpie in $PENDLE & $ETH. Besides revenue share and protocol incentives, vlPNP holders can benefit from the bribe rewards provided by the ecosystem partners of the Penpie and earn additional rewards up to 120% APR by voting on Penpie Bribery Market. The PNP token is a OFT token and can easily be bridged between Ethereum, Arbitrum and BNB Chain.
7. Historical Performance:
Since going live on the Mainnet on June 5, 2023, Penpie has established a solid track record in delivering emission and bribe payments to users.
8. Exit Strategies:
Users have the freedom to withdraw their funds from our protocol at any time, with no withdrawal restrictions in place. Regarding our vlPNP token, once locked, it enters an indefinite lock state. To unlock the vlPNP, users need to initiate the “Start Unlock” process, which triggers a 60-day “Cool Down” period. During this period, vlPNP holders can still earn passive income but are unable to participate in the voting process.
9.Why deposit into Penpie and not directly into Pendle?
The liquidity mining structure of Pendle Finance requires liquidity providers to lock up PENDLE tokens for up to 2 years in order to benefit from boosted PENDLE rewards. Liquidity providers without PENDLE tokens can only benefit from a small proportion of the daily PENDLE emission. This structure may not be ideal for many users who desire flexibility in managing their assets and investments. Locking PENDLE tokens for such an extended period (up to 2 years) poses an obstacle for investors looking to deposit yield-bearing assets into Pendle.
To address this issue, Penpie offers boosted APR for liquidity providers without requiring them to lock their PENDLE tokens. Penpie incentivizes PENDLE holders to convert their tokens into mPENDLE and lock the converted tokens on Pendle Finance. In doing so, Penpie acquires vePENDLE, granting it voting power to provide boosted APYs for liquidity providers. This helps Pendle Finance reach a wider user base and acquire more TVL on its platform.
Given the liquidity mining structure of Pendle Finance, depositing funds into Penpie represents the optimal choice for Mantle to earn boosted APYs on yield-bearing assets without needing to lock up PENDLE tokens.
We believe that depositing $5-10 million into Penpie’s liquidity pools is an effective approach for Mantle to earn yield on treasury funds while fostering innovation in DeFi. The increased TVL garnered by Penpie also redirects more PENDLE revenue to our platform concurrently, crafting a win-win scenario for both protocols. Thank you for taking our proposal into consideration. I am ready to address any queries or provide additional clarification. We eagerly anticipate the potential collaboration with the Mantle community.