Pendle Launches First stETH Volatility Trading Market via ARM Integration

⚡ stETH volatility now tradeable

By Origin Protocol
Dec 15, 2025, 4:49 PM
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Pendle introduces liquid yield trading for stETH volatility through ARM (Automated Risk Management) integration.​

How ARM generates yield:

  • Buys stETH at discount during volatility
  • Redeems back to ETH at 1:1 ratio via Lido
  • Captures spread as profit for depositors

Pendle splits ARM yield into tradeable tokens:

  • PT (Principal Tokens): Steady ETH exposure + fixed yield
  • YT (Yield Tokens): Leveraged upside to ARM yields

This creates the first direct way to trade stETH volatility on Pendle.​ Higher stETH price swings = more arbitrage opportunities = increased yields for ARM depositors.​

Traders can now:

  • Speculate on stETH volatility through YT
  • Lock in fixed yields from ARM via PT
  • Provide liquidity to earn trading fees

The ARM vault combines Lido stETH arbitrage with lending yield on idle ETH via Morpho, creating a unique yield source tied to protocol-driven arbitrage.​

Trade the market

Sources

When Lido $stETH sees even the slightest volatility, the stETH ARM captures it as yield. More volatility = more arbitrage = higher yields. With @Pendle_fi, you can trade that yield directly. 🧵

Origin Protocol
Origin Protocol
@OriginProtocol

Origin's ARM captures yield from natural LST price fluctuations. The strategy turns peg maintenance into yield opportunities on @Ethereum for $stETH and on @SonicLabs for $OS New incentives coming to @Pendle_fi, starting today:

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