Understanding Pendle’s alUSD Markets: A Technical Overview What is alUSD? alUSD represents tokenized shares of the Autonomous Liquidity USD vault—a code-driven USDC yield strategy built using Almanak’s AI Swarm technology. The vault algorithmically scans DeFi markets to allocate capital across approved protocols including Fluid, Euler v2, Aave v3, Compound v3, Morpho Blue vaults, and Yearn v3. It rebalances only when efficiency gains justify transaction costs, while continuously auto-compounding returns. Currently, alUSD maintains a 1.03023 USDC conversion rate, reflecting accumulated yield. Pendle’s Yield Tokenization Primitives Pendle splits yield-bearing assets into three components: Principal Token (PT): Represents the underlying asset redeemable at maturity. PT-alUSD holders lock in fixed yield rates, currently 6.51% APY for the December 11 market, independent of fluctuating base rates. Yield Token (YT): Captures all yield and points generated by the underlying asset until maturity. YT holders receive variable returns based on the vault’s performance (currently 2.32% base yield) plus accelerated Almanak Points distribution. Liquidity Provider (LP): Pendle pools combine SY (standardized yield) tokens with PT tokens to enable trading. LP positions earn trading fees, PENDLE incentives, and Almanak Points through the SY component only—the PT portion of the LP position does not earn points. Current Market Snapshot Active Market (December 11, 2025) - Total Liquidity: $17.30M - Pool Composition: 62.77% SY-alUSD ($10.86M) + 37.23% PT-alUSD ($6.44M) - Max Boosted APY: 15.62% - Daily PENDLE Rewards: 601.42 tokens Overall alUSD Ecosystem TVL - Gross TVL: $123.76M (alUSD supply + alpUSD supply) - Net TVL for Points: $24.95M (this excludes SY tokens that are locked in Pendle LP positions, as these represent claims on the same underlying alUSD already counted in the gross TVL) - Market depth maintains 10% slippage tolerance at 1.63M YT (long) and 971K PT (short) Almanak Points Distribution Mechanics The protocol allocates 333,333 Almanak Points daily to TVL providers, with points roughly corresponding 1:1 to future Almanak tokens. Distribution follows this structure: Daily Allocation Breakdown: The majority of daily points (~95%) go to TVL positions, while referrals typically receive approximately 5% of the daily allocation—though this referral percentage varies based on actual referral activity and is not a fixed preset amount. Current Active Market Breakdown: - YT-alUSD holders: 5x boost multiplier generating 270,554 net daily points (81.17% of total) after Pendle’s 5% protocol fee - LP SY portion: 1.5x boost multiplier yielding 10,284 daily points (3.25% of total) - PT holders: Excluded from points distribution (0x multiplier) Points distribute every 24 hours with no lock-up periods or exit penalties. Already-earned points remain with holders even after position exits. Technical Considerations Liquidity Access: Native minting/redemption occurs exclusively through Almanak’s platform to minimize slippage. Withdrawals require up to 26 hours processing time. Risk Profile: The pool may experience negative yield if underlying strategies underperform, as returns depend on the vault’s multi-protocol allocation performance. Market Maturity: The December 11 expiry date (23 days from current snapshot) means YT positions will cease generating yield and points at maturity, while PT holders can redeem for underlying alUSD at the conversion rate.