What is Pendle (PENDLE)?

Deep Dive

1. Purpose & Value Proposition

Pendle solves inefficiencies in DeFi yield management by letting users separate an asset’s principal from its yield stream. For example, staked ETH (stETH) can be split into:
- Principal Tokens (PT): Redeemable 1:1 for the underlying asset at maturity.
- Yield Tokens (YT): Claim future yield, acting like leveraged bets on yield fluctuations.

This allows strategies like locking in fixed returns, hedging against yield drops, or amplifying exposure to volatile rates.

2. Technology & Architecture

Pendle’s custom AMM accommodates assets with time decay (e.g., yield-bearing tokens that lose value as yield is paid out). Key innovations:
- Standardized Yield (SY) tokens: Wraps diverse yield assets (e.g., LSTs, RWAs) into a uniform format.
- Cross-chain expansion: Deployed on Ethereum, Arbitrum, and BeraChain, with plans for Solana/TON integration.
- Boros Module: Enables trading of perp funding rates and tokenized real-world yields (e.g., T-bills).

3. Tokenomics & Governance

• PENDLE utility: Used to vote on liquidity incentives, fee distribution, and protocol upgrades via vePENDLE (vote-escrowed tokens).
• Emission schedule: Fixed supply of 281.5M tokens, with weekly emissions decreasing 1.1% until 2026, then 2% annual inflation.
• Revenue share: 80% of swap fees and 3% of all yield generated go to vePENDLE holders.

Conclusion

Pendle reimagines yield as a tradable asset class, blending DeFi innovation with institutional-grade structured products. Its modular design and governance model position it as infrastructure for the growing on-chain fixed-income market. Can Pendle become the default marketplace for global yield as tokenized RWAs scale? Explore its integrations with EigenLayer and Ethena to see its flywheel in action.