Beginner’s Guide: The “Yield Trading” Strategy with a Four-in-One Advantage

In the decentralized finance (DeFi) sector, besides spot trading and contracts, there’s a more flexible and interesting type of trading — yield. Yes, you read that correctly, yield can be traded just like spot assets. It’s like having a cow that produces milk. You can either keep the cow and continue to collect milk (yield) every day, or you can pre-sell the future milk yield, turning it into instant cash.

First of all, don’t worry. We’re not here just to introduce yield trading for educational purposes. We’re talking about this today because a new project in the Solana ecosystem — RateX — has introduced a new way of yield trading. What’s even more exciting is that RateX also brings a four-in-one airdrop opportunity, which we’ll dive into later.

Let’s first understand what yield trading is and how RateX differs from the well-known Pendle.

The core idea of yield trading is just like that cow we mentioned earlier. In the DeFi world, there are interest-bearing assets, such as staked SOL, which generate yields (just like a cow produces milk daily). Yield trading involves splitting this “cow” into two parts:

• Principal Token (PT): This is equivalent to the cow itself. It’s stable and can be held for the long term.
• Yield Token (YT): This represents the milk the cow will produce over a certain period, which can be traded independently.

For example, suppose you’ve staked some mSOL (the staked version of SOL) with an annual yield of 7%. If you believe that Solana’s yield will increase, say to 9%, you could buy YT, and when the yield increases, you can sell it for a profit from the yield change. Conversely, if you think the yield might decrease, you could sell YT in advance to lock in the current yield. This flexible approach makes yield trading a “jack-of-all-trades” for DeFi investors.

Although yield trading sounds appealing, it didn’t immediately take off. It’s like owning a cow that can produce milk; while the milk has value, most people didn’t know how to make more money from the cow. Investors tend to focus on short-term high-return projects, and strategies like yield trading, which may seem “too professional,” initially attracted only a small group of DeFi experts.

However, with the rise of the points market, especially with Pendle’s platform, this field has experienced a resurgence.

In the DeFi world, many projects reward users with points for staking or providing liquidity. These points can later be exchanged for tokens or other rewards. However, acquiring these points often requires locking up a significant amount of funds and waiting for a long period. Pendle revolutionized this by splitting interest-bearing assets into PT and YT, offering users a new way to earn these points.

On Pendle’s platform, users can split interest-bearing assets (like eETH) into PT and YT. YT represents the future yield, including staking rewards and points. Users can buy YT directly to access future yields and points at a lower cost. This mechanism allows users to participate in point collection without holding large amounts of interest-bearing assets and even leverage it for higher returns. For example, by purchasing YT for eETH, users can gain future point rewards and enjoy potential airdrop yields.

After Ethereum’s re-staking surge, Bitcoin’s re-staking is coming. Similarly, Pendle also offers the opportunity to leverage YT for participating in Bitcoin re-staking airdrops. I’ve provided more details in my article, Bitcoin Re-Staking is Here. If you haven’t participated in Bitcoin re-staking, you should take a look.

Now, with RateX entering the scene, what new possibilities will it bring to yield trading?

Pendle has already made significant strides in the Ethereum ecosystem, but different blockchain ecosystems in the DeFi world have unique characteristics. RateX’s entry into the Solana ecosystem introduces new changes and possibilities for yield trading. By comparing RateX with Pendle, we can identify the features and differences in their positioning.

Similarities:

• Yield Trading Mechanism: Both platforms split interest-bearing assets into PT and YT, allowing users to trade the principal and yield separately.
• Potential Airdrop Rewards: Both platforms support leveraging YT to retain airdrop eligibility, attracting users seeking profits from airdrops.
• Liquidity Pools and Market-Making Mechanisms: Both platforms use AMM (Automated Market Maker) models to improve trading efficiency and offer high liquidity.

Differences:

• Ecosystem: Pendle is based on Ethereum, while RateX is part of the Solana ecosystem. Solana’s low fees and fast transactions make RateX more suitable for smaller users and high-frequency trading.
• Leverage Features: Pendle does not currently support leveraged trading, but RateX supports up to 10x leverage (still upcoming), which can amplify the profit potential of yield trading.
• Target User Base: Pendle is more popular with seasoned Ethereum users and institutional investors, while RateX appeals to a broader audience, including novice users and smaller investors, thanks to its lower barriers to entry and innovative features.

At the end of the day, RateX and Pendle are not fundamentally different. They share similar core logic, much like Coca-Cola and Pepsi, each with its unique appeal.

Pendle follows the “classic route” with Ethereum and L2, and the platform has locked over $4.8 billion in assets, securing its position in the DeFi world.

RateX, on the other hand, has chosen Solana as its new frontier. Its upcoming 10x leverage feature sets it apart from Pendle. While RateX’s total locked assets are currently only $35 million — less than 1% of Pendle’s — its recent growth has been notable.

The rise of RateX can be seen as the extension and evolution of yield trading across different ecosystems. For users like us, this is a major opportunity with little downside. What’s more, you may have missed Pendle’s airdrop, but you won’t want to miss RateX’s, especially with its four-in-one airdrop chance.

RateX offers three ways to participate:

1. Purchase YT Tokens and Use Leverage for Airdrop: Ideal for risk-seeking investors.
2. Earn Fixed Yield with RateX Airdrop Points: Suitable for more conservative investors.
3. Provide Liquidity for RateX and Earn Yield with Airdrop Points: Suitable for most investors.

But before proceeding, you’ll need to get familiar with a token called lrtsSOL.

4.1 Introduction to lrtsSOL

To maximize your yield in the RateX project, you’ll need to use the lrtsSOL token. If you’ve previously participated in the Solayer project and obtained sSOL, you can now “unleash” liquidity by restaking sSOL as lrtsSOL. This not only allows you to continue enjoying all the benefits from Solayer, but also adds extra rewards (including airdrops) from the Adrastea restaking project.

Adrastea Finance is a Solana-based DeFi protocol offering leveraged JLP and liquidity restaking for high-yield opportunities. It helps investors maximize returns and unlock liquidity using smart routing.

For example, sSOL is similar to stETH, and lrtsSOL is similar to eETH. In other words, by holding lrtsSOL, you’re effectively participating in both SOL staking and re-staking at the same time. This is the same as holding eETH, which means you’re participating in both ETH staking and re-staking simultaneously. If you’re not yet familiar with re-staking, you can take a look at “Demystifying Re-staking.” If you’re also interested in maximizing Ethereum re-staking yields, you can continue reading “ETH Re-staking: How to Maximize Yields After the Bonus Phase.”

Since the first batch of lrtsSOL has already reached its limit, the only way to acquire lrtsSOL now is through trading on Jupiter.

Click on this link with the invitation code to go directly to RateX.

The transaction fee commission generated by this invitation code, uGzyfwO6, will be fully allocated to the Solana wallet address for the Airdrop Reference project: CTo82xKyKZczd1WQbDeua5Yz1HmTTUvb5x47QWZbFnLz. You can confirm this in the “Airdrop Reference Whitepaper” and “ARP2 Live Demo: Manage Risk and Profits Will Follow.”

It’s important to emphasize that you don’t have to use this referral code if you don’t want to. Using it won’t hurt you in any way; it just allows RateX to allocate a portion of its transaction fees to the Airdrop Reference project. Essentially, you’ll be making an indirect contribution to Airdrop Reference. If, in the future, the Airdrop Reference platform is able to trace the specific source of the commission, you’ll earn points as well.

To get started, click on the above link with the invitation code. After entering the page, click “Connect Wallet” in the upper right corner.

In the popup window, choose the Solana wallet you want to connect. Phantom is recommended.

First Method: Provide Liquidity

Click on the “Liquidity” menu at the top, and you’ll enter the page shown below. Enter the amount you want to provide, then click the “Add Liquidity” button to complete the process.

By providing liquidity, you can not only earn about 10% APY, but also receive four types of airdrop points: 1x Sonic, 2x Adrastea, 4x Solayer, and 3x RateX. I’ve allocated 80% of my funds to this, which is a relatively conservative approach, and I recommend you do the same. The remaining 20% is used to purchase YT with leveraged mining.

Second Method: Buy YT with Leverage for Airdrop Points

Click the “Trade” menu at the top, enter the amount of lrtsSOL you want to spend, and you’ll see the amount of YT tokens you’re going to receive. Then click the “Trade” button and confirm in your wallet, as shown in the image below.

One thing to note is that you can’t exchange all your lrtsSOL at once for YT tokens, or your wallet will show an error. For example, when I had 0.55 lrtsSOL in my wallet, I could only spend 0.53 lrtsSOL.

Notice that 0.53 lrtsSOL bought 4.26 YT tokens? This means you’ve effectively used 8x leverage (4.26/0.53) to earn airdrop points. In other words, this is equivalent to providing 4.26 lrtsSOL in liquidity at once.

However, there’s something important to keep in mind: the value of your 4.26 YT tokens will drop to zero on June 28, 2025. The airdrop benefits will be collected by the address that holds these YT tokens.

In other words, holding 4.26 YT tokens is equivalent to providing 4.26 lrtsSOL in liquidity for airdrop points, but without the 10% APY reward.

Third Method: Earn Fixed Income

Click the “Earn” menu at the top, and you’ll see that lrtsSOL offers an annualized yield of 31.64%, which is quite high for SOL-based tokens.

We’ll convert all the lrtsSOL we didn’t spend into fixed income, as shown in the image below.

Please note that with this method, you’ll only receive the 3x RateX airdrop points. You won’t get the other airdrop points, which is the trade-off for earning the 30% return.

At this point, all three methods have been explained. You can check the status of your deposited lrtsSOL through the “Dashboard” menu, as shown below.

When RateX launches its 10x leveraged YT trading, we’ll provide a dedicated introduction, as this is where the key difference between RateX and Pendle lies.

Finally, I want to remind you again that both lrtsSOL and RateX are relatively new projects and come with certain risks. Be sure to manage your investment ratio carefully, and it’s best not to exceed 5% of your total assets.

Blockchain’s yield trading innovation is reshaping how investors manage returns. By splitting income-generating assets into Principal Tokens (PT) and Yield Tokens (YT), it provides investors with flexible tools for managing earnings, greatly enhancing capital efficiency. This innovation not only breaks the limitations of traditional yield trading but also allows ordinary users to participate easily.

The innovation in yield trading is similar to perpetual contracts. Just as perpetual contracts break time limits and inject vitality into the derivatives market, yield trading redefines return management, allowing future yields to flow freely. Both embody the limitless creativity of decentralized finance (DeFi). If you’re new to blockchain, I recommend checking out the “Beginner’s Guide: Perpetual Contracts.”

From Pendle to RateX, these platforms combine smart contracts with airdrops, liquidity mining, and other strategies, merging yield trading with multiple approaches and injecting strong vitality into DeFi. The rise of yield trading represents not only DeFi’s innovative leap beyond traditional finance but also signals the arrival of a more open, efficient, and inclusive financial era.

Airdrop Reference is an innovative blockchain education and promotion platform aimed at spreading basic blockchain knowledge and helping ordinary users understand and participate in the development of blockchain technology. The mission of this project is to lower the entry barriers to blockchain, promote high-quality blockchain projects, and allow more people to enjoy the benefits of the Web3.0 era.

Discord | 𝕏 | Zhihu Column | Mirror | Wechat 2.0 | Daii’s 𝕏