Justin Sun, the founder of TRON, made a bold move by purchasing Pendle PT tokens, enjoying a low-risk arbitrage operation with an annualized return rate of nearly 20%, which has attracted the attention of the community. This article explains the sources of benefits and risks of this operation, as well as provides risk mitigation strategies for reference.
According to on-chain analysts Yu Jin and Ai Yi, Justin Sun’s recent operations involve a total investment of 33,000 ETH in Ethereum re-staking projects that expire on June 27th. For example, he invested in Ether.fi, Puffer, and Kelp, which resulted in a high annualized return rate of 17.54%.
Pendle operates as an unauthorized yield-trading protocol by packaging yield-bearing tokens into standardized yield tokens (SY), and splitting them into principal tokens (PT) and yield tokens (YT). By purchasing PT, holders can redeem the underlying assets upon expiration and sell them at any time. To mitigate price risks, short positions can be taken on exchanges to hedge against price fluctuations.
In order to further mitigate price risks, strategies such as shorting on exchanges or using a break-even strategy can be employed, although the stability of returns relative to borrowing costs needs to be carefully considered.