Pop~ Pop~ Pop~ Come on, come on! The bubble maker is starting!
Bubble Cooker, as always
Ethena, Pendle, and Aave are forming a triangular bubble of TVL through circular lending. With circular lending, 1 USDT can be cycled to create 10x by minting USDE -> minting PT -> depositing PT -> borrowing USDT -> minting USDE, turning it into a $10 deposit.
At the same time, this $10 deposit exists in the TVL of these three protocols, meaning that $1 ultimately becomes a $30 deposit across these three protocols.
Do you think I'm going to criticize them? No, this is actually a good reason to get in.
Because they have a moat and can quickly create a large bubble. The ability to rapidly generate a large TVL, regardless of its authenticity, is a rare skill.
This can quickly attract investors who notice the protocol later to come in and take over.
@ethena_labs @pendle_fi @aave
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