Pendle 2025: Zenith
Foreword
The Pendle team was first formed in mid-2020, as we explored the idea of bringing fixed rates to the wild APYs of DeFi summer. It’s been almost 5 years, an eternity in crypto, but that time has passed incredibly quickly.
I’m proud of what we’ve accomplished and overcome so far and the team is in a great place to keep the momentum going. As the landscape continues to evolve, we see certain opportunities that we are in a unique position to capture with the expertise and experience we have accumulated over the years.
In this post I’ll outline:
- Pendle Highlights 2024
- The 3 Pillars of Pendle
- V2
- Building Citadels
- Boros
- The End Game
Pendle V2 highlights for 2024
Establishing the fixed yield market
2024 was a year of multiple milestones for Pendle. We established that market demand for fixed yield was truly substantial and that the protocol could properly scale from millions to billions.
We began 2023 with a $230M TVL and closed the year at $4.4B, a 20x increase. Our trading volume saw even greater growth, with daily averages rising from $1.1M in 2023 to $96.4M in 2024 — an almost 100x surge. We also saw users comfortably holding >$100M PT positions as trust in the protocol grew.
On June 26, 2024, our biggest maturity event showcased Pendle processing $3.8 billion worth of matured positions seamlessly all within just a few days.
To put this into perspective, if this TVL was its own chain, it would rank as the 5th largest blockchain by TVL, trailing only Ethereum, Solana, Tron, and BNB Chain.
Pendle works.
Today, Pendle sits amongst other blue chip DeFi protocols in TVL and trading volume. We comprise more than half of DefiLlama’s yield category.
2024 was the year we can confidently say Pendle not only established yield trading as a proper new vertical, but made it one of the biggest segments in DeFi.
The DeFi Sparkplug
2024 saw Pendle listing nearly 200 pools of various assets in different maturities across 5 different networks. An average of 4 new markets per week, every week. At our peak in December 2024, we had 121 active markets operating concurrently, up 2.5x from the year prior.
But it’s more than just breadth at play here. These markets have become essential hubs for other projects to build up their liquidity depth.
Today, Pendle has become the sparkplug for emerging narratives and protocols.
Pendle’s proven to be more than just a liquidity hub for other protocols. It’s a cornerstone for growth across DeFi. At its peak, 48% of Ethena’s TVL was attributable to Pendle. For every 100 BTC restaked in BTCfi, 42 were deposited through Pendle. Usual’s growth accelerated from $300M to $1.2B at its peak, with Pendle contributing ~30% of the growth.
And it’s not just protocols. Ecosystems such as Arbitrum, Zircuit and Berachain have also had success in boosting liquidity through Pendle.
Pendle PTs by themselves have also grown to become a $1.2B sub-economy, contributing 3.3% of the total collateral across all lending markets in EVM chains. About 20% of Morpho’s deposits is attributable to Pendle’s assets.
Where there’s yield, there’s Pendle.
We’ve taken a huge leap the past year in making Pendle the premier yield trading platform. But the job’s not done - far from it.
3 Pillars for World Domination
V2 Improvements
The on-chain yield market stands at around $17.7B of yield per year. Of this, only 4.97% ($880M) of annual yield has been Pendled [in layman’s terms, amount of yield made tradeable on Pendle]. Pendle has established a foothold, but the market continues to grow, and the amount of untapped yield potential is still so much bigger than what we’ve captured thus far.
The road towards our goal of owning the yield layer remains far and underway.
For V2, we’ll have fundamental improvements that can help us bridge this gap:
1. Opening Up
The protocol is already permissionless at its core. There have been many instances where pool deployment on Pendle was externally written and launched by third-party protocols. We will be making this feature accessible via the UI for others to create their own yield markets, giving access to Pendle’s tech. This two-pronged approach — community driven growth via permissionless listings coupled with strategic curation by our business development efforts — will help Pendle scale.
2. Dynamic Fees
Fee optimisation is a key focus going forward, to ensure a healthy balance between LPs, users and protocol longevity. We will be implementing dynamic fee rebalancing such that pools are at their optimal even as rates fluctuate.
3. vePENDLE Improvements
Expanding options for vePENDLE beyond weekly on-chain voting to allow all users, regardless of size, to participate. Improving protocol flows for vePENDLE holders will also be a targeted focus across all verticals we create (more on this later)
At this point, V2 is battle tested and will continue to remain Pendle’s bread and butter in conquering DeFi yields. Building atop its track record, we are adopting a more aggressive and ambitious approach towards product expansion this year.
This leads us to the next vertical, creating Citadels as outposts for the next generation of users.
Building Citadels
Pendle enabled billions in 2024. The target is now trillions.
At present, Pendle is only available to the DeFi userbase in EVM ecosystems. While EVMs are a massive market and have served us well, we see no reason why Pendle should be confined to them. Citadels are designed to help us break this limit.
Where there’s yield, there’s Pendle.
We intend to own the user experience in whatever form they choose to interact with the yield layer in DeFi.
Thus far, Pendle V2 is already one of the largest protocols after capturing just ~5% of DeFi yields. The interest rate derivatives market is a $558 trillion market — 30,000x bigger than our current yield markets. If Citadels can capture even just a small fraction of this market, Pendle can scale exponentially.
We have 3 Citadels in various stages of exploration and production.
1. PT for Non-EVM Ecosystems
The first Citadel outpost will spearhead the expansion of PT offerings beyond EVM chains.
Non-EVMs such as Solana, TON and HYPE have undergone explosive growth last year, attracting millions of potential users. Opening 1-click access to fixed yield across these ecosystems can instantly position Pendle to capture opportunities that were previously impossible and open the door to onboard a new wave of users.
2. PT for TradFi
The second Citadel will focus on a KYCed product designed to package our yields for regulated institutions, establishing a distribution pipeline which can provide TradFi entities access to the best crypto-native fixed yields.
This will include working with partners such as Ethena to provide isolated SPVs managed by regulated investment managers, opening access to Pendle for a new class of clientele in TradFi institutions.
3. PT for Islamic Funds
In a similar vein, Pendle will also create a Citadel focusing on compliance with Shariah principles. Islamic finance is a $3.9 trillion sector with penetration in over 80 countries around the world. Over the past decade, Shariah compliant financing grew at an exponential annual rate of 10%. Combined with the conviction and openness we see certain regions have in deploying traditional money into crypto markets, this is a segment which we foresee will be pivotal in expanding our global distribution and sphere of influence.
Boros
Disruption with Real Impact
As multi-cyclers, we understand there will always be a constant ebb and flow between memes and protocol development — that’s just the nature of our space. However our industry has also always improved over each previous cycle, and there has never been a better time to push the envelope on what’s possible technically.
At Pendle, we believe the biggest and most transformative blockchain applications are the ones that can solve real-world use cases better than their TradFi counterparts, especially in markets which are not yet liquid, transparent and open.
We envision Boros to be one of such apps, actually leveraging our industry’s technology to provide functionality currently not feasible in the TradFi space.
Pendling the Largest Yield Source
As the largest yield platform, we’ve witnessed first hand how the demand for yield trading blew up. Yield markets in Pendle V2 have already demonstrated immense growth, fueled by the universal need to hedge and speculate on yields.
With Boros, we’re taking this further. Its ability to support any type of yield — whether from DeFi, CeFi, or even TradFi markets such as LIBOR or mortgage rates — positions Pendle to dramatically broaden our market coverage and redefine what’s possible in the yield landscape.
To start, Boros will focus on the largest source of yield in the entire crypto market — funding rates.
On a daily basis, there’s $150B of open interest in the perp markets, paying or earning funding every second in a market that never sleeps. $200B of transactions are being exchanged every day, processing 10x more volume than the spot market. The amount of yield here has the potential to dwarf V2’s current spot market.
There is currently no reliable way to hedge funding rates at scale. Ethena is a prime example here where the protocol’s earnings and sustainability are highly dependent on the ups and downs of funding rates at the scale of billions of notional capital. With Boros, Ethena gains absolute control and predictability over its funding yield, enabling the protocol to lock in a fixed funding rate and ensure stability at scale.
Boros enables the trading of interest rates by swapping the floating yield-stream from the underlying asset for a fixed yield-stream (and vice-versa) until maturity
Another interesting market which captured attention is the launch of TRUMP on perp dexes, where perp traders were paying up to ~20,000% APY in funding just to maintain their long position. As you might imagine, this erodes profits significantly over a short period of time. Boros brings a new dimension to this by enabling TRUMP/USDT perp traders to hedge their floating funding-rate payments, turning it into a fixed payment instead.
On the flip side, traders executing cash and carry strategies now have the option to lock in these high yield opportunities and receive fixed payments.
Boros provides a new set of new standards for traders to interact with funding rates by providing them with powerful tools to control and optimize returns.
How will $PENDLE fit into this?
Where there’s yield, there’s Pendle.
And as our ecosystem grows, the value generated by the protocol — from all 3 pillars in V2, Citadels and Boros — will be seen in flows to vePENDLE.
Last year, active vePENDLE holders were the biggest beneficiaries of Pendle’s growth, generating ~40% APY on average, not including $6.1M worth of airdrops distributed in December 2024.
Endgame
When Pendle first launched, our vision was clear: to become the premier yield trading protocol. While that aspiration still remains at the heart of what we do, our mission has grown to match the scale of what we’re building today.
Pendle aims to be the doorway to your yield experience.
Be it a degenerate DeFi ape or a Middle Eastern sovereign fund, Pendle will be the gateway for users interacting with yield in any way, shape or form. From DeFi to CeFi, we provide the protocol, interfaces and tools to enable the entire yield journey.
Our 2025 roadmap includes bold new initiatives, two of which — Citadels and Boros — are entirely new verticals. While we’re committed to delivering on these ambitions, we also recognize that not everything will go perfectly as planned. When we hit roadblocks, we will adapt, re-evaluate, and find a way forward. The same things we’ve done in years past.
The market in 2025 will be noisy and turbulent, with inevitable distractions and moments of panic. In those times, we’ll stay grounded by focusing on our mission: scaling V2, pushing PT distribution to new heights, and unlocking Boros’ potential. Instead of competing on others’ terms, we will stay in our lane and execute on what we’ve set out to do.
By expanding our time horizon and looking beyond the immediate challenges, we remain confident that Pendle is on the right track to becoming the one yield layer to rule them all.
Job’s not done — but it will be.
TN
CEO & Co-Founder of Pendle
