Yield trading platform Pendle debuts new token to boost user capital efficiency

Pendle, a DeFi protocol that allows trading future returns from interest-bearing tokens, is changing its design to unlock capital efficiency for users.

Traditionally, Pendle users deposited yield-bearing tokens like staked ether (stETH) into the protocol. Tokens like ETH generate built-in yield from staking, a process of locking coins in a blockchain address to secure the network in exchange for rewards. stETH is the staked version of ether.

In return, Pendle users received vePENDLE, which represented their stake and voting rights to earn extra perks on top of their locked coins' natural earnings. The coins deposited kept paying their regular yield, with vePENDLE sprinkling bonus rewards without touching the principal.

The catch: once locked, those tokens were inaccessible, creating capital inefficiency.

Now, Pendle has launched sPENDLE – a liquid version of those locked tokens. Users can trade or use sPENDLE freely while still collecting the original rewards.

The change removes the need for users to lock up tokens for years just to earn rewards or participate in governance. Instead, holders will be able to stay liquid, access their funds within days, and still earn protocol rewards — a shift aimed at making Pendle easier to use and more attractive to a wider set of investors.

Under the new model, vePENDLE’s multi-year lockups will be phased out in favor of sPENDLE, which carries a 14-day withdrawal period and can be freely used across decentralized finance applications.

In simple terms, original crypto deposits keep earning base yields, while sPENDLE frees the locked portion, turning "stuck money" into flexible capital for other trades or DeFi plays.

The platform had more than $3 billion worth of tokens locked as of Tuesday.

Pendle said the change follows an internal review showing that only about 20% of PENDLE’s total supply was actively engaged under vePENDLE, largely due to its complexity and long lock requirements.

Protocol's revenue will now be used to buy back PENDLE tokens from the open market, with rewards distributed to eligible sPENDLE holders.

Buybacks reduce circulating supply and are often used to return value to token holders, replacing Pendle’s previous system that relied heavily on weekly voting and emissions incentives.

The protocol will also move away from manual “gauge voting” — a process where users vote on where token rewards are directed — toward an algorithmic emissions model. Pendle expects this to cut overall token emissions by about 30% while directing incentives more efficiently to markets with real demand.