Pendle

Pendle is a set of smart contracts for trading yield separately from the asset that produces it. Deposit a yield-bearing token such as staked ETH or a yield-bearing stablecoin, and Pendle splits it into a principal token (PT), which is redeemable for the underlying at a set maturity date, and a yield token (YT), which collects all the yield until that date. Both trade on Pendle's own market.

The website and app are run by Univerum Innovations Inc, a company established in Panama, according to Pendle's terms of use. Disputes go to arbitration in Singapore. Pendle does not publish a founders page or headcount. Its first version went live on Ethereum in June 2021 after a testnet release that March, starting with Aave and Compound deposit tokens.

Since August 2025 Pendle has also run Boros, a separate product on Arbitrum for trading perpetual-futures funding rates on margin. Boros has its own order book, fees and risks, and it is not available to US persons.

Every Pendle market starts by wrapping a yield-bearing token into SY, a standardized wrapper (stETH becomes SY-stETH, for example). SY is then split one-for-one into PT and YT with the same maturity date.

PT works like a zero-coupon bond. It trades below the value of the underlying and rises toward it as maturity approaches, so a buyer who holds to maturity locks in a fixed rate set at the moment of purchase. YT pays out the actual yield and any points the underlying earns until maturity, then expires worthless. Buying YT is a bet that the yield earned will exceed the price paid; it carries leverage, because a small outlay buys the yield on a much larger principal.

Liquidity providers deposit into Pendle's AMM and earn swap fees, PENDLE incentives and the underlying's own rewards. Market contracts cannot be changed once deployed; if a pool's rate drifts out of its range, a new market is launched and LPs must move themselves.

• Fixed yield: buy PT and hold to maturity.
• Long yield: buy YT, which gains if the underlying's yield rises or stays high and loses everything paid if it falls toward zero.
• Provide liquidity: earn fees and incentives, with exposure to both PT and the underlying.

Some lending markets accept Pendle PTs as collateral. Pendle's developer docs say risk curators on Aave and Morpho price PT with its linear discount oracle, which values a PT on a fixed schedule toward maturity instead of from the AMM price.

Pendle takes two protocol fees, both published in its docs as of October 2026. It also redirects yield from positions left unredeemed after maturity to its treasury, which is the cost most users miss.

Of swap fees, 20% goes to the pool's liquidity providers. The rest of swap fees and all yield fees are split 80% to PENDLE buybacks, 10% to the treasury and 10% to operations. DefiLlama counts about $14.9 million of fees in the 12 months to October 2026.

PENDLE is the governance and fee-sharing token. Since January 2026 holders stake it one-for-one as sPENDLE, which carries voting power and a share of the bought-back PENDLE. To receive rewards a holder must vote when a Pendle Protocol Proposal is open, unless the sPENDLE sits in an approved DeFi integration. Rewards are distributed every two weeks.

sPENDLE replaced vePENDLE, which required locks of up to two years. In its January 2026 announcement Pendle said only about 20% of supply had been locked in vePENDLE. Existing locks were converted into a non-transferable boosted balance that decays to 1x by each lock's end date. Pendle's tokenomics page says all team and investor tokens had vested by September 2024 and that weekly emissions were set to give way to a 2% annual rate for incentives from April 2026.

Pendle's contracts are permissionless, and anyone with a self-custody wallet can call them directly. The front end at pendle.finance is governed by terms of use that exclude persons in sanctioned or FATF-listed jurisdictions and name Cuba, Iran, North Korea, Syria, Russia, Belarus, Myanmar, Sudan, Zimbabwe, Venezuela, Crimea, Donetsk and Luhansk. Wallets on sanctions or screening lists are also excluded.

Pendle V2 does not exclude the United States in the terms we read in October 2026; Boros does, and the terms forbid using a VPN to get around either restriction. There is no account or KYC: the app connects to a wallet.

Pendle is non-custodial: deposits sit in its contracts, not with the company. Pendle states that all of its contracts are open source, and its GitHub audit folder holds reports on the main codebase from Ackee, Dedaub, Dingbats, ChainSecurity (2024), Spearbit (2024), WatchPug and individual reviewers, plus separate reviews of later market versions and sPENDLE. Audits reduce risk; they do not rule out a bug.

Some parts can be changed or stopped. Market contracts are immutable, but newer SY wrappers are upgradeable proxies controlled through Pendle's proxy admin and pause controller, and the team can pause contracts, as it did in September 2024. The docs do not describe the signers or any timelock behind those controls. Boros terms allow trading to be paused without notice.

Pendle does not publish a bug bounty amount in its docs. On 30 September 2025, after reports of PT and YT being minted and dumped, Pendle said the protocol had not been hacked and all funds were safe, according to The Block.

The largest risk is the underlying asset. A fixed rate on a token whose issuer fails, loses its peg or is exploited is a fixed claim on an impaired asset. Pendle's FAQ says it is not responsible for losses from third-party contracts.

• YT decays to zero at maturity; a buyer who misreads it can lose the whole purchase.
• Selling PT before maturity happens at the market price, which can be below what was paid if rates rise.
• Points and airdrops are promised by other protocols, and Pendle takes 5% of them.
• Thin pools mean slippage; check price impact before a large trade.
• Boros adds leverage, liquidations and automatic deleveraging.

Using Pendle means connecting a wallet at app.pendle.finance, choosing a market and maturity, and swapping into PT, YT or an LP position. Each new token needs an approval, so it is worth knowing how token approvals work and revoking unused ones.

There is no withdrawal queue for V2. Before maturity you exit by selling PT, YT or LP back through the AMM. After maturity PT redeems one-for-one for the underlying with no protocol fee, and Pendle's FAQ says nothing is lost by waiting, but matured positions earn nothing more for you. sPENDLE takes 14 days to unstake, or 5% for an instant exit.

Pendle has gone from a single Ethereum app to a multi-chain yield market with a second product.

• March 2021: first public version on the Kovan testnet.
• June 2021: mainnet launch on Ethereum with Aave and Compound tokens; Avalanche followed in November 2021.
• September 2024: Penpie, a third-party protocol built on Pendle, loses about $27 million; Pendle pauses its contracts and reports no loss of its own funds.
• August 2025: Boros launches on Arbitrum.
• January 2026: sPENDLE replaces vePENDLE.
• October 2026: terms of use revised; about $1.07 billion locked.