Pendle is a permissionless yield-trading protocol where users can execute various yield-management strategies.
Yield-bearing assets are splitted into the principal token (PT) and the yield token (YT) allowing users the option to earn fixed or flexible yields on Pendle’s v2 AMM.
PENDLE is the native utility token and its use cases include:
Bootstrapping Liquidity: PENDLE rewards are used as incentives to bootstrap liquidity for protocols
Incentive Channeling: Lock PENDLE as vePENDLE for up to 2 years to vote for the direction of emission rewards to the different pools
Fee Accrual: Locked vePENDLE holders accrue fees from two revenue sources
Swap fees generated by all swap on Pendle’s AMM
Yield Token (YT) fees. Pendle collects a 3% fee from all yield accrued via YT, 100% of which is re-distributed back to vePENDLE holders.
The protocol consists of the following major components working in conjunction:
Yield Tokenization: The underlying yield-bearing tokens are wrapped into SY (Standardized yield tokens) which is then split into the principal token (PT) and the yield component of it (YT).
Pendle v2 AMM: A capital efficient design model that is able to implement both PT and YT swaps (via flash swaps) using just a single pool of liquidity.
PENDLE has raised $3.7m USD in a seed round in Apr 2021, at 14.9% of the total supply with a FDV at $35m USD.
As at June 30, 2023, the total supply of PENDLE is 251 million PENDLE and the circulating supply is ~140 million (~56% of the total token supply.)
As of June 2023, the weekly emissions is about 460k. The emissions will gradually reduce by 1.10% weekly until April 2026. The current tokenomics allow for a terminal inflation rate of 2.00% per annum for incentives.
Learn more about the token distribution of PENDLE here.
Key metrics (as at July 3rd 2023)
Total Token Supply
Current Circulating Supply
140,183,903 PENDLE (~56.00% of total token supply)
Current vePENDLE Locked as Non-Circulating Supply
Binance Launchpool Allocation
5,021,222 PENDLE (~2.00% of total token supply)
Binance Launchpool Start Date
July 3rd 2023
1. What is Pendle?
Pendle is a permissionless yield-trading protocol allowing anyone to take a directional bet on the fluctuation of yields in the market. Yield-bearing assets are splitted into the principal token (PT) and the yield token (YT) allowing users the option to earn fixed or flexible yields on Pendle’s v2 AMM.
PT entitles you to the principal of the underlying yield-bearing token and is redeemable after maturity. PT is tradeable anytime even before maturity.
PT will always trade at a discount to the underlying due to the yield component extracted. It can be thought of as a “zero-coupon bond” in TradFi and the “fixed yield” is represented by the guaranteed price appreciation towards the full value upon maturity.
YT entitles you to the yield generated by the underlying yield-bearing token and the yield accrued can be claimed at any time from the Pendle dashboard. YT is tradable anytime even before maturity.
Buying YT can be thought of as “coupon payments” in TradFi and it allows users to long the yield of an asset and profit when the yield received is higher than the cost paid to buy YT.
Yield is a core component of DeFi, with LSD-Fi being the fastest growing market segment after ETH staking went live. Pendle aspires to be the premier DeFi venue for yield management and it also aims to deepen liquidity for protocols with yield-bearing assets.
1.1 Pendle's Key Highlights
Early pioneer of yield trading: Launched V1 mainnet in June 2021 attaining over $350 million in trading volume.
V2 Revamp: Launched v2 mainnet in Q4 2022 with a newly upgraded v2 AMM model that offers up to 200x more capital efficiency from v1. As of June 2023, Pendle v2 has surpassed $100m in TVL and $100m in total traded volume.
Capital-efficient AMM: Pendle’s AMM design allows both PT and YT swaps through a single pool of liquidity by implementing a pseudo-AMM with flash swaps. Users can enjoy lower slippage fees with deeper liquidity while liquidity providers earn fees from both PT and YT swaps doubling the yields for them.
Minimal Impermanent Loss (IL): Pendle v2 design ensures that IL is negligible as Pendle’s AMM accounts for PT’s natural price appreciation by shifting the AMM curve to push PT price towards its underlying value as time passes.
2. Token sales and economics
2.1 Token Distribution
2.00% of the total token supply
15.00% of the total token supply
7.00% of the total token supply
22.00% of the total token supply
16.00% of the total token supply
1.00% of the total token supply
37.00% of the total token supply
PENDLE token allocation
PENDLE token release schedule
All categories were fully vested after April 2023.
Pendle will be moving into a perpetual emission model. Currently weekly emissions is about 460k.
Weekly emissions will gradually reduce by 1.10% weekly until April 2026. At this point, the current tokenomics allow for a terminal inflation rate of 2.00% per annum for incentives.
3. Roadmap and Updates
3.1 Completed Milestones
Mainnet on Ethereum
Partnership with Aura, Balancer, and Rocket Pool
Mainnet on Arbitrum + Partnership with Camelot
Stargate Participation in Pendle
Equilibria, PenPie, and Stake DAO are building on top of Pendle
Pendle v2 cross $100m TVL
Pendle v2 AMM crosses $100m in cumulative traded volume
Pendle's PT is used as a collateral on a money market
Reached #7 on DefiLlama list of DEXes across all chains based on volume
Surpassed Uniswap and Curve to become #1 for wstETH trading volume
Link to Pendle's latest v2 whitepaper
3.2 Current Roadmap
Deploy on BNB Chain bringing yield trading to the BNB Chain ecosystem
Pendle Earn. A new simplified UI that offers decentralized fixed rate product using PT tokens.
Permissionless listing on Pendle app allowing any protocols to set up a yield market
3.3 Commercial and Business Development Progress
LSD-Fi Sector: Pendle protocol has integrated with the major blue-chip LSD protocols such as Lido’s stETH, Rocket’s rETH, Ankr’s ankrETH and Frax’s sfrxETH enabling deep liquidity for LSD assets.
vePENDLE War: Penpie XYZ, Equilibria and StakeDAO launched liquid ve-staking derivative on top of Pendle.
Perps/Derivatives: Pendle allows users to trade on both GMX’s GLP’s yields and Gains Network’s gDAI yields offering the option to hedge or long yields from traders’ fees.
DEX Liquidity: Pendle has created a yield market for LPs on Stargate USDT pool, a new Pool三 on Camelot’s PENDLE/ETH LP as well as Aura Finance & Balancer LPs to stack additional yields with the same liquidity.