In the fast-paced world of decentralized finance (DeFi), some combinations just click and create magic. Jason Yanowitz, co-founder of Blockworks, recently highlighted one such trio on X (formerly Twitter): Ethena as the issuer, Pendle as the yield market, and Aave as the money market. He called it "by far the best example of DeFi legos that exists today," and honestly, it's hard to argue against that.

For those new to the scene, DeFi legos refer to how different protocols can stack together like building blocks, each adding value to the others without needing permission. Ethena issues USDe, a synthetic stablecoin backed by hedged positions that generates yield. Pendle lets users split that yield into principal tokens (PTs) and yield tokens (YTs), allowing traders to bet on or hedge future yields. Then, Aave steps in as a lending platform where these PTs can be used as collateral to borrow other assets, amplifying the whole setup.

Yanowitz's thread points out how this synergy is flying under the radar despite its impressive results. Let's break down the charts he shared to see why this matters.

This first chart shows the explosion in PT collateral on major money markets. Aave has added a whopping $3.8 billion in PTs over just three months, capturing over 80% of the market share. Euler and Morpho trail far behind, with their lines barely moving. It's clear Aave is dominating here, thanks to its robust lending features that make PTs highly attractive as collateral.

Zooming in on market share, the second visual reinforces Aave's lead. The stacked area chart illustrates how Aave's portion (in purple) has ballooned, squeezing out competitors like Euler (light blue) and Morpho (darker blue). This shift happened rapidly, underscoring the network effects when protocols like Pendle route liquidity efficiently.

Finally, the Pendle TVL (Total Value Locked) chart ties it all back. Pendle's TVL has skyrocketed, with USDe on Pendle accounting for about 60% of the USDe supply and a massive 70% of Pendle's overall TVL. This loop—Ethena generating yield, Pendle tokenizing it, and Aave leveraging it—creates a self-reinforcing cycle that's pumping billions into the ecosystem.

The community echoes this excitement in the replies. One user noted, "Ethena made Pendle useful, Pendle routed demand to Aave. That’s composability with teeth." Another called it "the DeFi trinity no one talks about." Even institutional angles popped up, with mentions of how this could bridge to TradFi on chains like Converge.

Why does this matter for meme token enthusiasts? Well, while meme coins often thrive on hype and community, integrating with DeFi stacks like this can unlock new yield opportunities. Imagine wrapping meme token staking yields on Pendle and using them as collateral on Aave to borrow for more trades. It's a way to level up from pure speculation to sophisticated strategies, all while staying in the blockchain world.

Yanowitz also teased a podcast with @gdog97_ dropping soon—definitely worth a listen for deeper insights. If you're building or trading in crypto, keep an eye on these legos; they're reshaping how value flows in DeFi.

For more on emerging DeFi trends and how they intersect with meme tokens, check out our knowledge base at Meme Insider.