Pendle

Pendle is a DeFi protocol that turns yield into something you can trade. It splits a yield-bearing asset, such as staked ETH or a savings stablecoin, into a principal token and a yield token, so users can lock in a fixed return or speculate on future rates. Founded by TN Lee and Vu Nguyen and launched in 2021, Pendle also runs Boros, a market for trading funding rates. This page explains how Pendle works, what the PENDLE token does since the 2026 switch to sPENDLE, and which risks come with fixed-yield products.

What Pendle does

Most DeFi yields float: the return on staked ETH or a lending deposit changes every day. Pendle lets users separate the asset from its future income. Buying the principal token (PT) at a discount and holding it to maturity gives a known, fixed return. Buying the yield token (YT) gives the right to all the yield until maturity, a leveraged bet that rates will stay high. Liquidity providers earn fees and incentives for supplying the pools where PT is traded.

How Pendle works

First, a deposited asset is wrapped into a standardized yield token (SY). Pendle then splits SY into PT and YT with a fixed maturity date. At maturity, one PT can be redeemed for one unit of the underlying asset, and YT stops earning. Trading happens in a dedicated automated market maker designed for assets that converge to a known value, which limits impermanent loss for liquidity providers as maturity approaches. Pendle V2, live since late 2022, is deployed on Ethereum, Arbitrum, BNB Chain, Base, Mantle, Sonic, Hyperliquid and other networks.

Boros, launched on Arbitrum in August 2025, applies the same idea to perpetual futures: traders can take positions on the funding rate of BTC or ETH, for example to hedge a strategy that depends on it.

The PENDLE token

PENDLE has a total supply of about 281.5 million, of which about 62% circulates as of October 2026. Team and investor tokens were fully vested by September 2024. Emissions used to fall weekly toward a terminal 2% yearly inflation; since 29 January 2026 an algorithmic model sets incentives pool by pool instead of a fixed weekly budget. In January 2026, sPENDLE replaced the old vePENDLE lock: holders stake PENDLE one-for-one, can unstake in 14 days (or instantly for a 5% fee), and share buybacks funded by 80% of the protocol’s yield and swap fees.

Governance

sPENDLE holders vote on Pendle Protocol Proposals; holders who skip a live vote miss rewards for 14 days. The old gauge voting ended when algorithmic incentives arrived. Day-to-day control is more centralized than the token suggests: a 3-of-5 multisig controls the sPENDLE contract, and the operator is a company based in Panama, with no foundation or DAO legal entity.

History and key dates

• April 2021: $3.7 million seed and private round led by Mechanism Capital; PENDLE liquidity bootstrapping event.
• 2021: Pendle V1 goes live on Ethereum.
• Late 2022: Pendle V2 with standardized yield and a new AMM.
• July 2023: PENDLE listed on Binance; August 2023: investment from Binance Labs.
• September 2024: Pendle pauses its contracts during the Penpie exploit and protects user funds.
• August 2025: Boros launches on Arbitrum.
• January 2026: sPENDLE and algorithmic incentives replace vePENDLE.
• H2 2026 roadmap: more real-world assets, Boros markets beyond crypto, and Citadels for institutional and non-EVM access.

Security and risks

Pendle V2 has been audited by ChainSecurity, Spearbit, Dedaub, Ackee, WatchPug and others, and Boros by Spearbit and ChainSecurity. No exploit of Pendle’s own contracts has been reported; in September 2024 Penpie, a separate protocol built on Pendle, lost about $27 million, and Pendle paused its contracts to protect roughly $105 million. Risks to keep in mind:

• Underlying asset risk: PT and YT are only as safe as the staked token or stablecoin they wrap; a depeg passes straight through.
• Smart contract risk: some SY wrappers are upgradeable, and complex smart contracts stack on top of each other.
• Market risk: YT can lose most of its value if rates fall; selling PT before maturity can mean a loss.
• Liquidity and centralization: thin pools near maturity, and admin keys held by a small multisig.

Our risk score is 3 out of 5: a well-audited protocol with no direct exploit, but layered dependencies and complex products.

How to use Pendle safely

• Open the app from pendle.finance and check the maturity date before buying.
• Start with PT, held to maturity, before trying YT or liquidity provision.
• Look at the underlying asset first: who issues it and how it could lose its peg.
• Review yield products in our DeFi guide and avoid looping PT with high leverage.