Euler + Pendle PT Borrowing Strategy Doing 30% APY

Just completed a thorough test of Pendle and Euler on the Plasma network and I'm genuinely impressed with what I'm seeing.

Speed & Cost Comparison vs Base

Transaction Speed: Plasma is noticeably faster than Base
Gas Costs: Actually cheaper than Base - we're talking pennies per transaction
Multiple approvals and swaps executed with minimal gas spend

The network handled USDT approvals and PT swaps smoothly, with negligible slippage throughout the process.

Euler + Pendle Borrowing Strategy Walkthrough

The Setup

Swapped into PT (Principal Tokens) on Plasma to use as collateral on Euler, with the goal of borrowing stablecoins against the position.

Key Challenge: LTV Limitations

Initial Plan: Borrow at 84% LTV

Reality: Platform limited me to 70% LTV

This adjustment changed the math significantly:

At 70% LTV on a $25k position → ~$17,435 borrowing capacity
Required position size increased to $7,500 to maintain strategy viability

Critical Discovery: Wrong Market Link

Found that Pendle's link was directing to the USDE market instead of the correct sUSDAI market. Always verify you're on the right market before executing - this could have been costly.

Risk Assessment: The De-Peg Scenario

Before committing to the 70% LTV, I analyzed the sUSDAI token's historical performance:

Token Analysis (via CoinMarketCap)

Identified past de-peg event from October
Measured maximum drawdown: 4% de-peg
Recovery timeline: ~30 days (regained peg in November)

Position Sizing for Safety

With a 70% LTV, ran the numbers through my DeFi flight simulator:

Position size: $7,500
Health score after opening: 1.07
Verdict: Can comfortably weather a 4% de-peg event

Technical Notes & Considerations

Oracle Issues

Encountered adapter staleness warnings during setup:

"Adapters maximum staleness, 87,000 seconds, is insufficient for the feed's heartbeat"
Using Chainlink oracles - always check oracle parameters before borrowing

Approval Management

Euler grants unlimited approvals by default. Plan: Immediately revoke all approvals after completing operations for security.

Exit Strategy

Since I'm using PT as collateral:

Will need fresh capital to close the position
PT matures in 47 days
Planning to bridge borrowed stablecoins to mainnet
Can potentially roll or close other PT positions before this one matures

Wallet Display Quirks

Rabby wallet didn't immediately show the Euler position on Plasma. This is expected behavior - always verify positions directly on the protocol's portfolio page rather than relying solely on wallet displays.

Key Takeaways

✅ Plasma is legit - faster and cheaper than Base

✅ Always verify market links - saved myself from a costly mistake

✅ Risk management matters - borrowed at 70% instead of pushing for 84%

✅ Historical analysis pays off - checking past de-peg events informed my LTV decision

✅ Health score of 1.07 gives comfortable buffer for volatility

Final Thoughts

The combination of Euler's borrowing infrastructure and Pendle's PT tokens on Plasma creates interesting yield opportunities, but requires careful attention to: