60-Second Cheatsheet
If you know Pendle, here’s the mapping:| Pendle | ArcX | Same? |
|---|---|---|
| SY (Standardized Yield wrapper) | Strategy Vault | Conceptually similar: both wrap an underlying into a standardized interface |
| PT (Principal Token) | ST (Strategy Token) | Similar: both represent the principal claim at maturity |
| YT (Yield Token) | EPT (Expected Points Token) | Structurally analogous but economically different; see below |
| (no equivalent) | PointsToken (xPC, xHL) | ArcX-only: tokenized exchange points, 1:1 backed |
| PT + YT = Underlying | (1/R) ST + 1 EPT = $1 | Same shape. Different constants. |
| Custom logit AMM (PT/SY pool) | Custom Pendle-style AMM (ST/USDC pool) | Similar: both use time-decay curves for the principal token |
| Flash swap (leveraged YT) | Flash loop (leveraged EPT) | Analogous: both enable leveraged exposure to the “yield” side |
| Two-way arbitrage | One-way arbitrage (upward only) | Different. ArcX has no early redemption |
| Variable maturity (weeks to years) | Fixed epochs (8—12 weeks) | Different. ArcX resets each epoch |
| Yield streaming (real-time SY drip to YT holders) | Credit accrual (settled at finalization) | Different mechanism, similar goal |
| YT decays to $0 at maturity | EPT has positive terminal value | Fundamentally different |
| Implied APY (market price of yield) | (no direct equivalent) | ArcX prices points exposure, not yield percentage |
| vePENDLE (governance + fee share) | (not yet) | ArcX has no governance token currently |
The Anchoring Equations
Both protocols have a core identity that governs token relationships and pricing: Pendle: One unit of underlying can always be split into PT + YT, and PT + YT can always be recombined into the underlying. This identity holds at all times and enables two-way arbitrage. ArcX: Where R = ST exchange rate (NAV / totalShares). One dollar deposited produces a fixed combination of ST shares and EPT. But unlike Pendle, you can’t reverse this. There’s no early redemption to burn ST + EPT back into USDC before finalization. What the equations share: Both are conservation equations. The parts add up to the whole. Both enable “upward arbitrage”: if the tokens’ combined market price exceeds the underlying, someone can mint and sell at a profit. Where they diverge: Pendle’s equation is reversible (mint and redeem at any time). ArcX’s equation is one-directional (mint only, no early redemption). This one difference changes the entire pricing model.Architecture Comparison
Five Critical Differences
1. What Gets Tokenized
| Pendle | ArcX | |
|---|---|---|
| Input | Yield-bearing asset (stETH, sUSDe, GLP…) | USDC deposited into a perp DEX trading strategy |
| What’s split | Principal + yield stream | USDC outcome (strategy PnL) + exchange points outcome |
| Yield/points source | Native yield from the asset (staking rewards, lending interest) | Exchange points from strategy activity (trading, OI) |
| Who runs the strategy | The underlying protocol (Lido, Ethena, GMX…) | ArcX (centralized strategy execution) |
2. Terminal Value: YT Goes to Zero, EPT Doesn’t
This is the most important structural difference. Pendle YT streams yield in real-time. By maturity, all yield has been paid out. YT = $0 at maturity. ArcX EPT accrues credits, an abstract accounting unit that converts to PointsTokens only at finalization. EPT retains terminal value equal to the market price of those PointsTokens.| Pendle YT | ArcX EPT | |
|---|---|---|
| During the period | Yields stream in real-time (claimable SY) | Credits accrue (abstract, not claimable) |
| At maturity | $0 (all yield already paid) | Positive (redeemable for PointsTokens) |
| Time decay pattern | Monotonic decay → $0 | Decays toward terminal value, not zero |
3. Two-Way Arbitrage vs One-Way
Pendle has tight price corridor enforced by arbitrage in both directions. Any mispricing gets corrected. ArcX only has the upward half: deposit + sell if overpriced. No early redemption to correct underpricing. Consequence: The implied cost of EPT (via the flash loop) can diverge from theoretical fair value. Same thing as closed-end funds trading at NAV discounts.4. AMM Design
Pendle built a custom AMM --- logit-based curve that concentrates liquidity around expected yield ranges, with time-aware parameters that steepen as maturity approaches. Flash swaps route YT trades through the PT/SY pool. ArcX also uses a Pendle-style AMM with a time-decay curve for the ST/USDC pool. Key similarities:- Time-decay curve that steepens as maturity approaches
- Concentrated liquidity around expected ST price ranges
- ST price naturally converges to redemption value near maturity
- ST converges to finalNAV (unknown until settlement), not a predetermined 1:1 redemption value
- EPT has no AMM pool --- it’s deposit-only, with the flash loop replacing secondary market trading
- No flash swap equivalent for EPT --- the flash loop serves a similar purpose but works differently
5. Flash Swap vs Flash Loop
Pendle flash swap: Atomic operation to buy leveraged YT. The AMM handles the routing: deposit underlying → mint PT + YT → sell PT into pool → keep YT. All in one transaction. ArcX flash loop: Iterative operation to accumulate leveraged EPT. Deposit USDC → mint ST + EPT → sell ST on AMM → re-deposit proceeds → repeat. Multiple transactions (or batched atomically).| Pendle Flash Swap | ArcX Flash Loop | |
|---|---|---|
| Mechanism | Atomic via AMM routing | Iterative deposit → sell → re-deposit |
| What you get | Leveraged YT | Leveraged EPT |
| Capital efficiency | Very high (single tx) | High (multiple iterations) |
| Price impact | AMM absorbs in one trade | Each ST sale has separate price impact |
| Max leverage | Limited by AMM liquidity | Limited by ST discount depth |
Strategy Mapping: Pendle Strategy → ArcX Equivalent
”Buy PT for Fixed Yield” → “Buy Discounted ST”
| Pendle | ArcX |
|---|---|
| Buy PT at discount → redeem 1:1 at maturity | Buy ST below NAV on ArcX AMM → redeem at finalNAV |
| Fixed yield = discount to underlying | Return = finalNAV - purchase price |
| Guaranteed if held to maturity | Not guaranteed. Depends on strategy performance |
”Buy YT for Leveraged Yield” → “Flash Loop for Leveraged EPT”
| Pendle | ArcX |
|---|---|
| Buy YT → receive yield stream → hope APY stays high | Flash loop → accumulate EPT → hope points are valuable at TGE |
| Leverage: YT costs ~5—10% of underlying → 10—20x yield exposure | Leverage: Flash loop gives ~2.7x EPT per dollar at 10% ST discount |
| Time decay: YT → $0 (all yield streamed) | Time value: EPT terminal > $0 (PointsToken claim) |
“LP in Pendle Pool” → “Provide Liquidity on ArcX AMM”
| Pendle | ArcX |
|---|---|
| Provide PT/SY liquidity | Provide ST/USDC liquidity on ArcX AMM |
| Zero IL at maturity (PT converges to SY) | Reduced IL via time-decay curve (ST converges toward NAV) |
| Earn: swap fees + PENDLE incentives + native yield | Earn: swap fees from flash loop activity |
Pricing Comparison
| Pendle | ArcX | |
|---|---|---|
| Pricing concept | Implied APY: market price of yield as annual percentage | Minting parity: EPT_fair = 1 - X/R derived from the flash loop cost |
| What moves the price | Changes in implied APY (supply/demand for yield) | Changes in ST discount, creditRate expectations, points sentiment |
| Natural direction | YT decays toward $0; PT rises toward underlying | EPT implied cost varies with ST discount; ST converges toward finalNAV |
| Arb enforcement | Two-way (tight corridor) | One-way upward (ceiling only) |
Trust Model Comparison
| Pendle | ArcX | |
|---|---|---|
| Smart contracts | Fully on-chain, audited, immutable core | On-chain token logic, off-chain oracles and strategy |
| Strategy execution | None. The underlying protocol runs it | ArcX runs the strategy (centralized) |
| Oracle | PY index derived from on-chain state | NAV, creditRate, totalPoints all reported by ArcX |
| Redemption | Trustless: PT+YT → underlying via smart contract | Admin-triggered finalization → then trustless redemption |
| Overall trust level | High (on-chain, audited, battle-tested) | Lower (centralized oracles, trust in strategy execution) |
What ArcX Does That Pendle Doesn’t
Tokenizes Pre-TGE Points
Pendle doesn’t create a separate points token. ArcX creates standalone, transferable PointsTokens (xPC, xHL) that persist across epochs and become redeemable after TGE.Multi-Exchange Points from a Single Deposit
A single ArcX deposit into a cross-exchange strategy (e.g., Pacifica-Extended funding arb) gives you points exposure on multiple exchanges simultaneously with separate EPTs per exchange.Deposit-Only EPT Model
Instead of a tradeable YT with time-decay AMM pricing, ArcX uses a deposit-only EPT model where the flash loop replaces secondary market trading. Simpler system, still gives you leveraged points.What Pendle Does That ArcX Doesn’t
Two-Way Arbitrage
Pendle’s mint-and-redeem cycle creates tight pricing. ArcX’s one-way arb allows persistent discounts on the implied EPT cost.Governance and Fee Distribution (vePENDLE)
vePENDLE holders vote on pool emissions, receive protocol fees, and boost LP rewards. ArcX has no governance token or fee-sharing mechanism currently.Permissionless Market Creation
Anyone can deploy a new SY wrapper on Pendle. ArcX strategy creation is permissioned.Real-Time Yield Claiming
Pendle YT holders can claim yield at any time. ArcX EPT holders must wait for finalization.When to Use Which
| If you want to… | Use Pendle | Use ArcX |
|---|---|---|
| Earn fixed yield on a yield-bearing asset | PT (buy at discount, redeem 1:1) | Not the primary use case |
| Get leveraged yield exposure | YT (buy cheap, receive yield stream) | Not applicable |
| Get leveraged pre-TGE points exposure | YT on point-earning assets (indirect) | Flash loop (direct, capital-efficient) |
| Split strategy PnL from points | Not possible | Deposit → flash loop (keep EPT, sell ST) |
| Buy discounted strategy exposure | Buy PT for fixed yield | Buy discounted ST for strategy returns |
| Access a trustless, audited system | Pendle (fully on-chain) | ArcX has centralized components |
Can I use both Pendle and ArcX?
Can I use both Pendle and ArcX?
Yes. They serve different purposes. Pendle is for yield optimization on DeFi assets. ArcX is for accessing and trading perp DEX strategy outcomes (PnL + points). You could use both: Pendle for fixed yield on staked assets, ArcX for points on perp strategies.