What is Pendle (PENDLE)?

Deep Dive

1. Purpose & Value Proposition

Pendle allows users to separate and trade the future yield from assets like staked ETH or liquidity pool tokens. By splitting these into PT (principal value redeemable at maturity) and YT (rights to future yield), it creates markets for yield speculation, fixed-income strategies, or hedging against rate fluctuations. For example, a farmer could sell YT for immediate cash flow while holding PT to recover their principal later (Bitso Blog).

2. Technology & Architecture

The protocol uses a specialized automated market maker (AMM) designed for assets with time decay (e.g., yield that diminishes as maturity approaches). This allows efficient pricing of PT and YT, even as their values change over time. Pendle also supports multi-chain deployments, including Ethereum, Arbitrum, and HyperEVM, to tap into diverse liquidity sources (NullTX).

3. Tokenomics & Governance

• PENDLE: Governance token used to vote on incentives for liquidity pools and receive 80% of protocol fees.
• vePENDLE: Locked PENDLE (up to 2 years) that boosts rewards and voting power. Over 37% of PENDLE’s supply is locked, aligning long-term incentives (OKX).

Conclusion

Pendle reimagines yield as a flexible, tradable asset class, bridging DeFi innovation with institutional demand through products like Boros (perpetual yield trading) and Citadels (regulated yield markets). As crypto’s fixed-income layer expands, can Pendle maintain its dominance amid rising competition and regulatory scrutiny?