Article Source: Pendle

Foreword

The Pendle team was founded in the mid-2020s, when we were exploring how to introduce fixed-rate borrowing into the DeFi frenzy of astronomical Annual Percentage Yields (APY). Five years in crypto is like eternity, yet this time has passed by in the blink of an eye.

I am proud of the team's achievements to date and the challenges we have overcome. We are poised to continue our growth trajectory. As the industry continues to evolve, leveraging our years of expertise and experience, we stand in a unique position to capture new opportunities.

This article will outline the following:

· Pendle's 2024 Milestones

· Pendle's Three Pillars

· V2 Upgrade

· Building the "Fortress"

· Boros New Project

· Endgame Vision

Pendle V2 2024 Highlights

Establishing the Fixed Income Market

2024 is a milestone year for Pendle. We have validated the market's strong demand for fixed income and demonstrated that the protocol can scale from millions to billions.

At the beginning of 2023, our Total Value Locked (TVL) was $230 million, soaring to $4.4 billion by the end of 2024, a 20x increase. The trading volume growth is even more remarkable—average daily trading volume jumped from $1.1 million in 2023 to $96.4 million in 2024, nearly a 100x increase. As user trust in the protocol strengthened, users holding over $100 million in PT positions became a common sight.

On June 26, 2024, we completed the largest-ever batch settlement: Pendle seamlessly settled $3.8 billion worth of expiring positions in just a few days.

Measured by TVL, Pendle's scale is now comparable to the fifth-largest blockchain, trailing only Ethereum, Solana, Tron, and BNB Chain.

Pendle has proven its worth.

Today, Pendle's TVL and transaction volume have established it as a top-tier protocol in DeFi. We hold over half of the share in DefiLlama's "Yield Class" protocols.

By 2024, we can confidently state that Pendle has not only solidified yield trading as a standalone track but has also made it one of the largest sectors in the DeFi ecosystem.

DeFi Engine

By 2024, Pendle has rolled out nearly 200 multi-asset, multi-term liquidity pools on 5 different chains, averaging 4 new markets added per week. At the peak in December 2024, we were simultaneously operating 121 active markets, a 2.5x increase from the previous year.

But this is not just a victory of scale. These markets have become a central hub for other projects to build deep liquidity.

Today, Pendle has become the launchpad for emerging tracks and protocols.

Indeed, Pendle is not just a liquidity hub for protocols but a cornerstone of the entire DeFi ecosystem's growth. At its peak, 48% of the TVL in Ethena came from Pendle; for every 100 BTCs re-lent in the BTCfi ecosystem, 42 were deposited via Pendle; Usual's size surged from $3 billion to a peak of $12 billion, with around 30% of the growth contributed by Pendle.

The beneficiaries are not just the protocols—ecosystems like Arbitrum, Zircuit, and Berachain have significantly boosted liquidity through Pendle as well.

Pendle's PT (Principal Token) itself has evolved into a $12 billion secondary economy, representing 3.3% of the total collateral in the EVM on-chain lending markets. About 20% of Morpho's platform's deposit assets are sourced from Pendle.

Where there is yield, there is Pendle.

Over the past year, we have made significant strides in transforming Pendle into a premier yield trading platform. But the mission is far from over—the journey continues.

Three Pillars of Global Expansion

V2 Upgrade

The on-chain annual yield market is estimated to be around $17.7 billion, with only 4.97% ($880 million) of the yield being made tradable through Pendle (i.e., "Pendled"). While Pendle has made significant strides, the market is still expanding, and the untapped yield potential far exceeds our current coverage.

We are still far from our goal of "capturing the yield layer," but the journey has begun.

The V2 upgrade will help us close the gap through the following fundamental improvements:

1. Open Ecosystem

The protocol is inherently permissionless. Several third-party protocols have previously deployed liquidity pools on Pendle through external development. We will open this feature through the UI, allowing more participants to leverage Pendle's technology to autonomously create yield markets. This dual-track strategy—growth through community-driven permissionless listings complemented by strategic selection from the business team—will drive Pendle's scalable expansion.

2. Dynamic Fees

Fee optimization is a key focus for the future, aiming to balance the long-term interests of liquidity providers (LPs), users, and the protocol. We will implement a dynamic fee rebalancing mechanism to ensure that the liquidity pools are always in optimal condition amid interest rate fluctuations.

3. vePENDLE Enhancements

The functionality of vePENDLE will extend beyond weekly on-chain voting, opening up participation channels to all users (regardless of scale). Optimizing the protocol interaction flow for vePENDLE holders will also be a core target across business lines (as detailed later).

Currently, the V2 version has been rigorously tested and will continue to serve as Pendle's core weapon in tackling the DeFi yield market. Building on our existing achievements, we will drive product expansion this year with a more aggressive and expansive strategy.

Thus, we are stepping into the next vertical—building "Citadels" as the strategic vanguard for the next generation of users.

Building the "Fortress"

By 2024, Pendle had reached a billion-dollar scale. Today, our goal is trillion-dollar.

Currently, Pendle only serves DeFi users in the EVM ecosystem. Despite the size and performance of the EVM market, we believe Pendle should not be limited to this. The "Fortress" plan aims to break through this boundary.

Where there is yield, there is Pendle.

Our goal is: wherever users interact with the DeFi yield layer, Pendle will be at the core of their experience in any form.

Currently, Pendle V2 only covers about 5% of the DeFi yield market but has already become one of the largest protocols. The size of the interest rate derivatives market is as high as $558 trillion—3 million times the current yield market. If the "Fortress" can capture even a tiny share, Pendle will achieve exponential expansion.

We are exploring and advancing three "Fortress" plans:

1. Extension of PT to Non-EVM Ecosystems

The first "Fortress" outpost will drive the expansion of PT (Principal Token) to ecosystems beyond the EVM.

Non-EVM chains such as Solana, TON, HYPE, etc., saw explosive growth last year, attracting millions of potential users. By covering these ecosystems with a one-click fixed-income gateway, Pendle will quickly seize opportunities that were previously out of reach and usher in a wave of new users.

2. TradFi PT Deployment

The second "Fortress" will focus on compliance products, package returns for regulatory agencies, establish distribution channels, and enable traditional financial institutions to access the best crypto-native fixed income.

We will collaborate with partners like Ethena to jointly launch a Special Purpose Vehicle (SPV) managed by a compliant asset management institution, opening Pendle access to traditional finance clients.

3. Shariah-Compliant PT for Islamic Funds

Likewise, Pendle will also create a "Fortress" compliant with Shariah principles. Islamic finance is a global market worth $3.9 trillion, covering over 80 countries. Over the past decade, Shariah-compliant financial products have experienced explosive growth at an annual rate of 10%.

New Project Boros

The Power to Disrupt Reality

As builders who have navigated multiple cycles, we understand the industry's dynamics—memes and protocol development always ebb and flow. However, blockchain technology reaches new highs with each cycle, and now is the perfect time to push the boundaries of technology.

Pendle firmly believes that the most transformative blockchain applications should be able to solve real-world problems more efficiently than traditional finance—especially in markets with liquidity constraints, low transparency, and closed systems.

Our envisioned Boros is such an application: leveraging blockchain technology to achieve functionalities beyond the reach of traditional finance.

Anchoring the Greatest Source of Yield

As the ultimate yield platform, we have witnessed the surge in yield trading demand. Pendle V2's yield market has shown significant growth potential, driven by the market's widespread need for yield hedging and speculation.

Boros will take this vision to new heights. It can support any type of yield—whether from DeFi, CeFi, or traditional financial markets like LIBOR rates or mortgage rates—enabling Pendle to significantly expand its market coverage and reshape the possibilities in the yield space.

Boros' initial target is the crypto market's largest source of yield—the funding rate.

The perpetual contract market has a daily average open interest of $150 billion, with the funding rate flowing every second in the 24/7 market; the daily trading volume is $200 billion, ten times that of the spot market. The yield potential here is enough to surpass V2's current spot market by leaps and bounds.

Through Boros, Ethena can achieve absolute control and predictive capability over funding yield, lock in a fixed funding rate, and ensure operational stability at scale.

By transforming the fluctuating yield stream of underlying assets into a fixed yield stream (and vice versa) until maturity, Boros enables rate trading.

Another typical case is the TRUMP perpetual contract launched on a perpetual DEX—long position holders are required to pay up to a 20,000% APY funding rate, eroding short-term profits significantly. Boros presents a new solution for this: TRUMP/USDT perpetual traders can hedge to convert the floating funding rate into a fixed payment.

Conversely, traders executing the carry trade strategy can also lock in high-yield opportunities to earn a fixed return.

Boros sets a new standard for fund rate interactions by providing robust yield control and optimization tools.

How Does PENDLE Fit into This Vision?

Where there is yield, there is Pendle.

As the ecosystem expands, the value created by the protocol through the pillars of V2, Bastille, and Boros will manifest as yield flowing to vePENDLE.

By 2024, active vePENDLE holders will be the primary beneficiaries of Pendle's growth—an average annualized return of around 40%, not accounting for the $6.1 million airdrop distributed in December.

Endgame Vision

Pendle's original vision was crystal clear: to become a leading yield trading protocol. This goal remains unchanged, but our mission has evolved in line with our business scale.

Pendle is committed to becoming the ultimate gateway for user yield interactions.

Whether a crypto-native enthusiast or a Middle East sovereign wealth fund, Pendle will serve as the gateway for various yield interactions. From DeFi to CeFi, we provide protocols, interfaces, and tools to empower the complete yield journey.

The 2025 roadmap includes bold innovations, with Bastille and Boros being two new verticals. We understand that not all plans can be executed flawlessly. In the face of obstacles, we will adjust our strategies, reassess, and pave new paths—just as we have done over the past few years.

The 2025 market will undoubtedly be tumultuous, filled with disruptions and panic. At that time, we will anchor to our mission: to expand V2, drive PT distribution to new heights, and unleash the potential of Boros. Instead of competing on others' tracks, we will focus on our established goals and move forward resolutely.

Looking ahead and transcending current challenges, we firmly believe that Pendle is steadily advancing towards its goal of the "Unified Yield Layer."

The mission is not yet accomplished, but it will be.

TN

Pendle CEO & Co-Founder

This article is contributed content and does not represent the views of BlockBeats.

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