What is Pendle comes down to a decentralized finance protocol that tokenizes the future yield of yield-bearing assets. It separates an asset’s principal from its expected returns, allowing users to trade, hedge, speculate on, or lock in exposure to DeFi yields.
How Pendle works
Pendle first wraps a yield-bearing asset into a standardized yield token, known as SY. The SY asset can then be divided into two instruments:
- Principal Token (PT): Represents the principal claim and can generally be redeemed for the underlying asset at maturity.
- Yield Token (YT): Represents the right to receive the asset’s future yield until a specified maturity date.
The structure resembles bond stripping in traditional finance. PT can provide fixed-rate exposure when purchased below its eventual redemption value, while YT gives exposure to future variable yield without requiring ownership of the entire principal position.
Pendle V2 uses an automated market maker designed for time-sensitive yield assets. Its liquidity curves focus on implied annual percentage yield rather than only token prices, and they tighten as maturity approaches. A single PT/SY liquidity pool can support both PT and YT trading through flash swaps, improving capital efficiency.
Pendle is deployed as smart contracts on external EVM-compatible blockchains, not as an independent blockchain. CoinStats lists deployments on Ethereum, Arbitrum, Avalanche, BNB Smart Chain, Optimism, Base, Sonic, Berachain, HyperEVM, Monad, and Robinhood.
What is Pendle used for?
Pendle supports several fixed-income-style applications in DeFi. Users can buy PT to seek more predictable returns, purchase YT to speculate on rising future yields, or sell YT to reduce exposure to variable income. The protocol can tokenize yield from liquid staking assets, liquid restaking assets, stablecoins, lending positions, synthetic dollars, and some real-world-asset products.
PT can also be used as collateral in compatible money markets. Integrations with Aave, Morpho, Euler, and Dolomite support strategies involving borrowing, looping, and leveraged fixed-yield positions. Pendle’s Boros platform extends the same focus on rates into on-chain funding-rate markets, where users can take leveraged long or short positions on variable funding rates.
Who is behind Pendle and where is it based?
Pendle was founded in 2020 by TN Lee and Vu Nguyen. Dealroom records an official launch in June 2021, while early project accounts describe the protocol as having previously operated under the name Benchmark. TN Lee is publicly identified as Pendle’s co-founder and chief executive. Some third-party sources identify GT and YK as early team members, but a complete official list of key developers is not publicly confirmed in the reviewed material.
Public company profiles associate Pendle with Singapore, but the sources do not conclusively confirm a Singapore-incorporated company, foundation, or other legal entity. The protocol’s legal structure and jurisdiction therefore remain publicly unconfirmed.
PENDLE tokenomics
PENDLE is used in Pendle’s governance, incentive, staking, and fee-related systems. The market snapshot recorded a price of $2.40, a 24h change of +3.40%, a market cap of $417.65M (rank #177), and 24h volume of $64.24M on 1 October 2026 at 02:23 UTC.
The circulating supply is 173,625,960 PENDLE, compared with a total supply of 281,527,448 PENDLE. Pendle’s documentation states that team and investor tokens had fully vested by September 2024. Future supply increases were therefore described as coming mainly from incentives and ecosystem development rather than additional team or investor unlocks.
The documented emission schedule stated that weekly emissions were 216,076 PENDLE in September 2024, declining by 1.1% each week until April 2026. It then moved toward a terminal inflation rate of 2% per year for incentives, subject to governance changes. A permanently fixed maximum supply should not be assumed.
Pendle historically used vePENDLE, created by locking PENDLE, for governance and incentive allocation. Current documentation describes sPENDLE as the staked form. Pendle allocates 80% of yield and swap fees to buybacks, while 5% of yield accrued by yield tokens is charged as a protocol fee. For swap fees, 20% goes to liquidity providers, with the remaining amount split between buybacks, the treasury, and protocol operations.
Consensus and security
Pendle has no independent consensus mechanism, validator set, or block-production system. Its contracts inherit the security and operational assumptions of their host networks, including Ethereum and Arbitrum. Security also depends on smart-contract code, bridges, oracles, liquidity, and the underlying assets represented in each market.
Pendle reports reviews and audits involving firms and security communities including Ackee, Dedaub, ChainSecurity, Spearbit, WatchPug, and Code4rena participants. Audits reduce identified implementation risks but do not remove the risks associated with contract vulnerabilities, underlying protocols, market maturity, leverage, or liquidations.
Ecosystem and competitive advantages
Pendle’s ecosystem includes integrations with Ethena-related assets, Aave, Morpho, Euler, Dolomite, Contango, Ceres, and AFI. Centralized platforms including Binance, Bybit, Coinbase, and Bitget have also listed or integrated Pendle assets, although exchange listings are separate from protocol-level integrations.
Its main advantage is treating yield as a tradable asset class. PT and YT provide more precise control over principal and rate exposure than ordinary spot holdings, while the specialized AMM is designed for assets whose value changes with maturity. Multi-chain deployment, composability with lending protocols, permissionless market creation, and the expansion into funding-rate trading through Boros further distinguish Pendle from standard decentralized exchanges and yield aggregators.
Development and roadmap
Current development centers on Pendle V2 and Boros. V2 activity has included broader PT integrations, cross-chain PT functionality, automated routing, developer APIs, and support for staking, restaking, stablecoin, and real-world-asset yields. Application updates have also referenced Aave PT markets, PT-looping incentives, Morpho vaults, and deployments on newer networks including X Layer and Monad.
Boros represents Pendle’s broader move into on-chain interest-rate infrastructure. Its hybrid order-book and AMM design supports funding-rate futures, leveraged positions, and on-chain settlement, with longer-term development aimed at wider interest-rate products.