Pendle: Yield King

PENDLE

V2

Pendle V2 today is the premier go-to-market venue for YBS, YBA, and PoS LST token issuers to bootstrap TVL. The protocol uniquely benefits both traders, asset issuers, and money markets creating a self-reinforcing liquidity network effect and deep moat.  

Traders love the platform for the ability to speculate on yields, hedge rate exposure, and, most importantly, accumulate boosted points for the lowest capital outlay (capital efficiency). Asset issuers benefit from the ability to bootstrap TVL at faster rates than otherwise *possible *with vanilla points external to Pendle V2. Pendle V2 bootstraps TVL by turning YTs into points amplification instruments, directing incentives to make LPing PTs and YTs attractive, and enabling PT utilization in money markets for low-vol looping. Money market participants flock to PTs for the fixed yields, and money market apps love PT listings because they enable high borrows, efficiently monetizing TVL. As a consequence, Pendle is meaningfully entrenched into the points/yield complex, as demonstrated by its increased take rate on yields implemented in May 2025. 

The Pendle V2 flywheel is unusually strong: attract the next hot YBA issuer (e.g. Ethena, USDai, kHYPE, Plasma ecosystem), expand the universe of tradable rates & points speculation, attract more traders and liquidity, and the cycle repeats. 

The protocol charges a 5% take on all yield accrued to YT positions, including points, and tiered swap fees. Swap fees are determined by pool deployers, and 20% of all swap fees collected are given to LPs of the pool as yield. The remaining swap fees and all YT fees are split between vePendle holders and Pendle protocol in the following ratio: 80% to vePendle, 10% to Protocol Treasury, 10% to Protocol Operations.

Deepening Network Effects: Points Pricing & An Evolving Term Structure