Cleave

Cleave is the first yield-tokenization primitive for AMM LP positions, bringing Pendle-style fixed-income exposure to volatile-pair liquidity for the first time. Built on Uniswap v4 and deployed natively on Arbitrum, where Pendle and Spectra already live.

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Descripción

Cleave is yield infrastructure for Arbitrum DeFi. It splits an AMM liquidity position into two tradeable tokens: a principal token (PT-LP) that redeems at face value at maturity, and a yield token (YT-LP) that captures the variable swap-fee yield. Risk-averse capital can take the fixed-income side; aggressive capital can take leveraged fee exposure. This is the same primitive Pendle built a $5B+ protocol on for stable yield-bearing tokens but extended to volatile-pair LP yield, which has never worked before because of impermanent loss.

The architecture is three contracts: a Uniswap v4 hook that takes exclusive custody of the liquidity position and tracks an exchange rate plus a monotone watermark; an ERC-5115 standardized-yield wrapper that exposes the position as a Pendle/Spectra-compatible asset; and a YieldContract that mints and settles the PT/YT split. The watermark mechanism is the core innovation, it freezes yield accrual when the exchange rate falls below its historical high, structurally protecting principal during impermanent loss without locked junior collateral, oracles, or external liquidations. This is the design that killed every prior attempt at LP tranching (Element, APWine, Sense, Notional); Cleave avoids it by following Pendle's Path A risk model and letting market price discovery on a secondary AMM (Pendle or Spectra) handle implied APY.

Arbitrum is the natural home for this product. Pendle's largest deployment outside Ethereum mainnet is on Arbitrum One; Spectra is natively deployed on Arbitrum; and the bulk of existing Uniswap v4 liquidity will live where the deepest secondary markets do. Cleave's SY wrapper is verified compatible with Pendle's live Arbitrum One mainnet contracts via fork test: selectors, asset info, rewards interface all match. The moment Pendle opens market creation, our LP tokens plug straight in.

Progreso del hackathon

Built and deployed the full system end-to-end on Arbitrum Sepolia: the v4 hook with custody and watermark, the ERC-5115 wrapper, the YieldContract with PT/YT minting and maturity settlement, plus a SwapSimulator for demonstrating fee accrual and price-shock IL on testnet. 97 tests across the suite — 81 unit and non-fork integration tests pass on plain forge test; 16 fork-dependent tests pass against live Arbitrum Sepolia and a mainnet fork of Pendle's Arbitrum One contracts. Verified ERC-5115 conformance bugs (previewRedeem argument ordering, accruedRewards return type) by running our SY wrapper through Pendle's production interfaces, both fixed before deployment. Frontend deployed to Vercel: full deposit / swap / split / redeem flow, with live exchange rate, watermark tracking, pool health states, and a watermark-frozen banner that triggers when impermanent loss takes the position below its high-water mark. All six contracts verified on Arbiscan. Demo flow validated end-to-end on the live deployment. Next steps from here. The immediate priority is a live secondary market for PT-LP and YT-LP, either through Spectra, or through Pendle when their market-creation factory opens beyond governance-gated access. In parallel, the next engineering milestone is a wrapper-vault contract that accepts existing Uniswap v4 position NFTs directly, v4 hooks attach to pools permanently at creation, so the billions in existing v4 liquidity can't use Cleave's hook without redeployment. A separate vault that custodies position NFTs, settles their accrued fees at entry, and exposes the same ERC-5115 + PT/YT interface unlocks that existing liquidity base without forcing migration. Roughly 6-8 weeks of focused work. Beyond that: a multi-pool factory for permissionless market creation across any v4 pair, audit and mainnet deployment on Arbitrum One, and composition with adjacent protocols like YieldBasis (whose IL-protected leveraged LP tokens under a Cleave split produce a fully IL-protected, yield-stripped LP token — a genuinely novel product nobody has shipped).

Estado de recaudación de fondos

N/A

Líder del equipo

JJules Delforge

Enlace del proyecto

Sector

DeFiInfra