What Is Pendle (PENDLE) Crypto?

Pendle (PENDLE) is one of the eye-catching projects in the DeFi industry. With DeFi users increasingly looking for new ways to manage yield, Pendle enters the scene offering something unique, trading the future yield of your tokens. 

This protocol doesn’t just promise returns, it reshapes how users interact with yield-bearing assets. Whether you’re a seasoned DeFi user or just exploring crypto, understanding what Pendle (PENDLE) is could offer a window into the next evolution of yield strategy.

What Is Pendle (PENDLE)?

Pendle (PENDLE) is a DeFi protocol that allows users to tokenize and trade the future yield of their crypto assets. Essentially, it separates a yield-bearing token into two parts, a Principal Token (PT) that represents ownership of the underlying asset and a Yield Token (YT) that represents the future yield generated by that asset.

This setup allows users to explore more advanced strategies, such as locking in a fixed return, speculating on future yields, or protecting themselves from drops in yield rates. Pendle operates across several major blockchain networks including Ethereum, Arbitrum, and BNB Chain.

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Pendle (PENDLE) History

Pendle Finance was created by a team of pseudonymous developers known publicly as TN Lee, Vu Nguyen, GT, and YK. The project first appeared in 2020 under the name "Benchmark," aimed at building an on-chain yield aggregator. 

The team officially launched Pendle in June 2021 and has since rolled out significant updates, including Pendle V2 in 2022 and expansion to multiple chains like Arbitrum, BNB Smart Chain, Mantle, and Optimism.

Timeline Highlights:

• March 2021 – Pendle testnet launched.
• June 2021 – Official Ethereum mainnet launch.
• November 2021 – Expansion to Avalanche (now deprecated).
• November 2022 – Pendle V2 launched with a new automated market maker (AMM) design.
• 2023-2024 – Launches on Arbitrum, BNB Chain, Optimism, and Mantle.
• January 2024 – Introduced Limit Orders for more strategic trading.
• February 2024 – Plans revealed for future yield-related financial products, like index funds and structured products.
• April 2024 – No confirmation yet on Pendle V3, though it is expected.

Pendle has attracted support from major investors such as Binance Labs and Crypto.com Capital, helping solidify its place in the DeFi landscape.

How Pendle (PENDLE) Works

Pendle’s platform revolves around Standardized Yield (SY) assets and its unique time-decay-aware AMM.

1. Tokenization of Yield
   Users can deposit yield-bearing tokens like aUSDC or stETH, which are then split into:
   • Principal Tokens (PT): Representing ownership of the deposited asset.
   • Yield Tokens (YT): Representing the right to earn the future yield of that asset.
2. Trading and Strategy
   These tokens are then tradeable, allowing users to:
   • Sell YT for upfront profit (fixed yield strategy).
   • Buy YT to gain leveraged exposure to future yield (longing yield).
   • Hedge against yield drops by selling YT.
3. Liquidity Provision
   Users can also provide liquidity using Pendle’s AMM, which adjusts for the time-sensitive nature of YT. This creates more efficient markets for trading future yields.
4. Governance and Staking
   PENDLE token holders can lock their tokens to receive vePENDLE, a vote-escrowed version used to vote on governance proposals and boost rewards on the platform.

Pendle’s innovative setup gives users greater control and flexibility over how they earn and manage DeFi yields.

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About the PENDLE Token

PENDLE is the native token of the Pendle Finance ecosystem. It serves two major functions:

• Incentives: Users who provide liquidity are rewarded with PENDLE tokens and a share of trading fees.
• Governance: By locking PENDLE into vePENDLE, users gain the ability to vote on proposals and influence the platform's future direction. vePENDLE also boosts reward rates in liquidity pools.

The utility of PENDLE is key to how the entire protocol functions, balancing incentives with participation.

PENDLE Tokenomics and Distribution

The initial token allocation for PENDLE reflects a long-term vision that prioritizes liquidity and sustainable growth. Below is the breakdown of its token distribution:

• Liquidity Incentives: 49.21%
• Team: 17.74%
• Ecosystem Fund: 14.83%
• Investors: 12.07%
• Liquidity Bootstrapping: 5.35%
• Advisors: 0.80%

Nearly half of the total supply is allocated to incentivize liquidity, showing Pendle’s commitment to deepening market participation. The remaining distribution ensures fair share to developers, early backers, and ecosystem expansion.

Read also: Is Crypto Lending the New Narrative in Solana? Exploring DeFi’s Explosive Growth

Conclusion

Pendle (PENDLE) offers a fresh approach to yield management in DeFi by allowing users to trade the future yield of assets. It gives both conservative and aggressive investors a new toolkit to optimize their strategies. 

With strong investor backing, a clear vision, and a growing user base, Pendle is positioning itself as a major player in the evolving DeFi yield market.

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FAQ

What is Pendle (PENDLE)?

Pendle (PENDLE) is a decentralized finance protocol that allows users to trade and manage future yields of DeFi assets by splitting them into principal and yield tokens.

How does Pendle (PENDLE) work?

Pendle tokenizes yield-bearing assets into two parts—Principal Tokens and Yield Tokens. These can be traded or used in liquidity pools to implement yield strategies.

Who created Pendle (PENDLE)?

Pendle was created by a pseudonymous team including TN Lee, Vu Nguyen, GT, and YK. It was officially launched in June 2021.

What is PENDLE crypto used for?

The PENDLE token is used for liquidity incentives and governance. It can be staked to earn rewards and vote on protocol upgrades.

Which networks support Pendle?

Pendle operates on Ethereum, Arbitrum, BNB Chain, Optimism, and Mantle.

Can I earn passive income with Pendle?

Yes, users can earn yield by providing liquidity, holding Yield Tokens, or staking PENDLE for vePENDLE rewards.