Case Study

An interview with TN Lee from Pendle

July 30, 2021

by @andreasantichio

People ask me - what is DeFi Alliance and how it works?

That's when I decided to write this article to briefly explain what we are and how our company works, as well as share some insights from Pendle Finance, one of our cohort members from our last batch.

DeFi Alliance (DA) is the leading decentralized finance accelerator. We help startups source liquidity and support from a broad industry network — the DeFi Alliance Network (DAN)— that includes trading firms, founders, and investors. Our mission is to grow DeFi to one billion users by 2025.

Our accelerator program is 6 weeks long and is typically comprised of 10-15 companies per batch. We recently completed our fourth batch bringing the number of companies we've helped accelerate to 50+. At the end of the program, companies present their projects to market makers, liquidity providers, service providers, alumni, the general public and users at a virtual Demo Day

Instead of taking equity from the companies that participate in our accelerator program, we partner with some of the most successful DeFi entities to sponsor the program. Our investment fund may co-invest in some of the projects each batch.

What is so unique about DeFi Alliance? We are the first DeFi accelerator. Our strong DeFi network is the #1 value add for founders that go through our program.

Pendle participated in our 4th batch (DAA4). Co-founded by TN Lee (@tn_pendle), GT, YK and Vu, it is an automated market maker (AMM) protocol that enables users to trade and hedge future yield. By the end of our program, I interviewed TN Lee to give us some idea of how the experience of going to the program was for him, his team and Pendle. Check it out!

Andrea Santichio: How did you come up with the idea for Pendle Finance?

TN Lee: Late 2020, we were all participating in yield farming, getting exposed to yields, but the lack of options to lock-in rates when the rates were varying was a somewhat troubling. At the same time, we recognized just how important and significant fixed-rate products are in financial markets. So given the absence of fixed-rate products then and knowing it's usefulness to the DeFi ecosystem, we were motivated to pursue this direction of creating a fixed-rate product. There was an opportunity there.

Andrea Santichio: Why did you choose the DeFi Alliance Accelerator Program? Can you tell us about your experience during the application process?

TN Lee: I think the DA application process was pretty straightforward. Back then, when we were starting out, aside from product development, we also focused on getting as much visibility and exposure as possible. We were trying out many different venues, and former teammates from Kyber and imToken/Tokenlon (both are DA alumni) suggested that I also apply to the program, and I did. Then we got connected to Qiao in Jan 2021, and that's when we pitched the idea to the DeFi Alliance team for the first time. We had two sessions. The first conversation was very basic. It was really the team trying to get to know me as a person and understand the product we're trying to build. A couple of weeks later, DeFi Alliance reached out again.

We had a lot of fun exchange ideas because the people at DA know DeFi very intimately. With the knowledge and context, they were able to ask relevant questions that allowed me to expand and elaborate on the product scopes and the ideas behind them

Ah! I remember that toward the end of the second session, as Qiao was still evaluating our project because Qiao was still evaluating our project, he requested to sit in at one of our all hands meeting. I agreed, but I didn't tell most of the teammates that he was joining. After he'd been on the call for an hour, I told my team that we had a special guest I think a lot of people were surprised, but I wanted Qiao to get a feel for how the team works and the different dynamics between team members. I think it went well!

The accelerator program has a straightforward 2-step process: 1)  application (here) and 2) interview rounds. Interviews are conducted by DA partners and sometimes by our network members too.

Andrea Santichio: Tell us more. Did you actively participate in all the sessions? How was it?

TN Lee: Yeah. I think we tried to find the sessions that were relevant to us, the session on market makers and marketing and growth. I remember very fondly of the session with Greg from Maker, where he shared his personal experience about his approach to increasing distribution outlets for DAI and best practices to engage potential partners were very useful. I thought that was really, really useful. And I thought the session with Qiao, Mabel Jiang and Xiahong Lin.

Andrea Santichio: I think that session was called the China Chapter Landscape? Yes, that session was great! We have awesome people in that group.

DeFi Alliance Network is a global entity. Within the alliance there are different Geo Chapters that bridge the gap between geographies and help us build a strong global community. Currently we have China, India and Europe Chapters. Their members are former DeFi entrepreneurs, investors, and market makers who deeply know DeFi in their regions.

TN Lee: Truthfully, I think DeFi Alliance has probably one of the best collection of people in DeFi. It's incredible. Because if we want to reach out to, let's say, Dan Robinson, he's literally just a few text messages away. So that's a really wonderful community that DeFi Alliance offers, and I think this network is one of the program's greatest assets.

Andrea Santichio: Yeah. We have the accelerator program, but we also have this amazing global community that you can easily reach out to once you've participated in the program. Changing topics slightly, how was the mentorship aspect of the program for you? How did it go? Was it helpful?

TN Lee: I think to a large extent, they were really helpful. The first mentor that we had was Dorothy Liu from Synthetix. Most of our teammates are based out of Singapore, so Dorothy was able to give us more insight into the China landscape than we would have been able to gather on our own. And personally, I'm also physically located Singapore. And as most of us know, China is somewhat isolated and rather distant from most other parts of the world.

So having an insider who knows the in and out was very important. And the fact that she's involved in one of the most important projects in the space right now, Synthetix, is also a big plus. So previously she was with Hash Key, and then now she's with Synthetix. So she gets different kinds of perspectives that she can offer that I don't think a lot of people would be able to.

We're doing a DeFi project. We are pretty much global from day one. It's important for us to understand how we want to target the different geographical segments.

Andrea Santichio: Absolutely! Now, could you share three major milestones that you accomplished by the end of the program?

TN Lee: Yeah. I think the first milestone was a public liquidity event in April. Then, the second milestone was a mainnet release in June. And the third milestone was Demo Day, which forced us to focus more on the market participants. After the Demo Day, we got connected to breakout rooms. People who were interested in our product reached out and asked relevant questions. We then connected with them individually. That's when we elaborated more on our product, our propositions, and those people became users of our product, or at least liquidity providers. It was very promising to me that the kind of audience we were targeting was there, at the Demo Day. I think DeFi Alliance is a very important platform for us because the users that we are trying to reach out to are pretty much the people who is also paying attention to DeFi Alliance. After the Demo Day, people who reached out to us were either looking for investment or they became liquidity providers to our protocols.

Andrea Santichio: Exactly. Most of our members at the DeFi Alliance are either market makers or liquidity providers, and that's a unique value that our Accelerator Program offers to the participants. Were you trying to raise fund for the company at that time?

TN Lee: No, we were not looking to raise funds by then. We had already passed the stage of fundraising by that time. But we were really glad that we connected to our product users and liquidity providers. We were really looking for user feedback and after the accelerator program, DeFi Alliance brought us that.

To give you some more context, we were seeing about 30 Million USD in total liquidity across our pools. The average liquidity provision per address is quite sizable (about $70,000 USD). Our product is a derivative, so more complex to begin with. The audience we were targeting were the sophisticated traders, those who operate a relatively large amount of money already on behalf of other people or on their own, and they are quite knowledgeable when it comes to financial derivatives. This is the group of users we are reaching out to, and fortunately for us the accelerator was able to connect us to a number of them directly or indirectly.

Andrea Santichio: Did you have the opportunity to get to know more about other projects or to get closer to other cohort members?

TN Lee: I think this is an area that I feel short changed, and this is not to the fault of the program.  I feel that being remote in general adds some extra layers to collaboration opportunities. But we did have a recent collaboration with Rari pool. We are utilizing their market to set up a pool that recognizes OT which is one of the assets on our platform used as a collateral. We also became pretty connected to the Sushi team. But I must say, if there is an opportunity to mingle around in person, that would also be awesome!

Andrea Santichio: Everybody is asking us that! I'd love to!!! So, moving towards the end of this interview, where do you think we could improve for future applicants?

TN Lee: I think having a more unified identity could be helpful. For example, the DeFi Alliance team could look through the Demo Day materials and add some uniform style and format to it. Some people talked more about teams, other more about products for example. I think adding more details about the product traction could also raise audience awareness. Finally, adding branding to the videos so if someone in the future sees it, he/she knows that it was part of the Accelerator Program of DeFi Alliance.

Andrea Santichio: Agree! Our V1 branding looked very cheap, LOL. But, guess what, we recently launched our new website and webapp.

Lee, thank you so much for this interview! We look forward  keeping in touch with you all, seeing you participating in our sessions and events, and wish the best for the company and the whole team!

TN Lee: You are welcome! Always glad to collaborate and be in touch to the DeFi Alliance.

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