What is Pendle (PENDLE)?

Deep Dive

1. Purpose & Value Proposition

Pendle solves a core DeFi problem: illiquid and locked future yield. It allows users to tokenize the income stream from assets such as staked ETH (stETH) or yield-bearing stablecoins. This creates a marketplace where yield becomes a tradable asset, enabling strategies like locking in fixed rates, speculating on future yield, or obtaining upfront capital by selling future income.

2. Core Technology & Mechanism

The protocol uses a specialized Automated Market Maker (AMM) designed for assets whose value decays over time. When a user deposits a yield-bearing asset, Pendle mints two distinct tokens: a Principal Token (PT), which represents the underlying asset's value at a future date, and a Yield Token (YT), which represents the right to all yield generated until that date. These tokens can be traded independently on Pendle's markets, providing liquidity and strategic flexibility.

3. Tokenomics & Governance

The PENDLE token is central to ecosystem governance and incentives. A major upgrade in January 2026 replaced the old vePENDLE model (requiring 2-year locks) with sPENDLE, a liquid staking token (Icryptan). sPENDLE holders can unstake after 14 days and are eligible for rewards funded by protocol revenue buybacks, simplifying participation and aligning incentives for broader adoption.

Conclusion

Fundamentally, Pendle is infrastructure that commoditizes yield, turning passive income into an active, tradable market. As on-chain finance matures, how will its role evolve beyond crypto-native assets to encompass broader real-world yields?