What Is Pendle?

Pendle is a decentralized finance protocol that introduces yield tokenization to the crypto ecosystem. It allows users to split yield-bearing assets into two separate components: a Principal Token (PT) representing the underlying asset value, and a Yield Token (YT) representing the future yield generated by that asset. This separation enables entirely new financial strategies, including trading future yield, locking in fixed rates, and gaining leveraged yield exposure.

Overview - Table of Contents
What Is Pendle?
Getting Started With Pendle
How To Get A Pendle Wallet?
Pendle Resources
How To Buy Pendle?
Latest Pendle News

Pendle was originally launched in 2021 by a pseudonymous team led by TN Lee and Vu Nguyen. The protocol initially operated on Ethereum before expanding to Arbitrum and later to other chains. The project gained massive traction in 2024 when it became a central hub for trading yield from liquid staking tokens (LSTs), liquid restaking tokens (LRTs), and various DeFi yield sources.

The core mechanism works as follows: when a user deposits a yield-bearing asset (such as stETH from Lido, eETH from EtherFi, or sUSDe from Ethena), Pendle wraps it into a Standardized Yield token (SY) and then splits it into PT and YT components. The PT represents a claim on the principal at maturity, while the YT represents a claim on all yield generated until maturity. Both PT and YT can be freely traded on Pendle's built-in AMM (automated market maker).

Pendle's AMM is specifically designed for yield trading. Unlike standard constant-product AMMs, Pendle uses a modified version optimized for assets that converge to a known value at maturity. The AMM accounts for the time decay of yield tokens and the convergence of principal tokens to their underlying value, resulting in significantly lower impermanent loss for liquidity providers compared to standard AMM designs.

The protocol enables several distinct strategies. Users seeking fixed yields can purchase PT at a discount to the underlying asset, effectively locking in a guaranteed rate of return if held to maturity. Those bullish on rising yields can purchase YT tokens to gain leveraged exposure to yield without needing the full principal amount. Liquidity providers can earn trading fees and PENDLE incentives by supplying assets to Pendle pools.

Pendle introduced vePENDLE (vote-escrowed PENDLE), a governance mechanism where users lock PENDLE tokens to receive voting power. vePENDLE holders can vote to direct PENDLE emissions to specific pools, earn a share of protocol revenue (from trading fees and yield fees), and receive boosted rewards on their own liquidity positions. This mechanism aligns long-term token holders with protocol governance and fee distribution.

The protocol charges a small fee on yield accrued by YT holders (currently 3% of yield) and a portion of swap fees. These fees flow to vePENDLE holders and the protocol treasury. This creates a sustainable revenue model that grows as more yield-bearing assets and users enter the ecosystem.

Pendle has become one of the most important DeFi primitives in the ecosystem. Its total value locked (TVL) grew substantially through 2024 and into 2025, driven by demand for fixed-rate exposure to liquid staking yields, restaking points farming, and various other yield opportunities. The protocol's permissionless pool creation allows anyone to list new yield-bearing assets, enabling rapid integration of new DeFi products.

Getting Started With Pendle

Getting started with Pendle as a yield trader or liquidity provider:

Step 1: Set up an EVM-compatible wallet (MetaMask, Rabby, or similar) connected to Ethereum, Arbitrum, or another supported chain.
Step 2: Acquire a yield-bearing asset (such as stETH, eETH, or sUSDe) or ETH/stablecoins to trade on Pendle.
Step 3: Visit the Pendle app and connect your wallet.
Step 4: Choose a strategy: buy PT for fixed yield, buy YT for leveraged yield exposure, or provide liquidity to earn fees and incentives.
Step 5: Optionally lock PENDLE tokens for vePENDLE to earn protocol revenue and boost rewards.

Pendle's interface shows implied yield rates for each pool, making it easy to compare fixed rates across different assets and maturities. Users should pay attention to maturity dates, as PTs converge to their underlying value at expiry.

How to Get a Pendle Wallet?

MetaMask

MetaMask is the most commonly used wallet for interacting with Pendle. It supports Ethereum, Arbitrum, and other networks where Pendle operates. Install the browser extension or mobile app and connect directly to the Pendle interface.

Rabby Wallet

Rabby is a popular DeFi-focused wallet with multi-chain support and transaction simulation features. It works seamlessly with Pendle and provides clear transaction previews before signing.

Hardware Wallets

Ledger and Trezor hardware wallets can be connected to MetaMask or Rabby for enhanced security when interacting with Pendle. This is recommended for users managing significant positions.

Coinbase Wallet and Rainbow

Other EVM wallets such as Coinbase Wallet and Rainbow also support connections to the Pendle application, offering alternative options for users who prefer those interfaces.

Pendle Resources

How to Buy Pendle?

Centralized Exchanges

PENDLE is available on Binance, Bybit, OKX, KuCoin, Gate.io, and other exchanges. Common trading pairs include PENDLE/USDT and PENDLE/BTC. Users can purchase with fiat or crypto depending on the exchange.

Decentralized Exchanges

PENDLE can be swapped on Uniswap (Ethereum), SushiSwap, Camelot (Arbitrum), and other DEXs. The Pendle app itself facilitates PENDLE token swaps. Ensure you have sufficient ETH or the chain's native token for gas fees.

After purchasing PENDLE, holders can lock it for vePENDLE to earn protocol revenue and participate in governance, or hold it for potential appreciation as the protocol grows.

Latest Pendle News

Pendle has established itself as a cornerstone DeFi protocol for yield trading, with its TVL and trading volumes reaching new highs. The protocol expanded to multiple chains and integrated dozens of new yield-bearing assets, including tokens from the liquid restaking ecosystem (EtherFi, Renzo, Puffer, Kelp), stablecoin yield sources (Ethena's sUSDe, MakerDAO's sDAI), and RWA-backed yield products.

The team has continued shipping protocol improvements, including new AMM versions with improved capital efficiency, expanded maturity offerings, and enhanced tooling for institutional users. Pendle's role as a yield price discovery mechanism has made it increasingly important for the broader DeFi ecosystem, as its implied rates serve as benchmarks for crypto yield markets. The protocol's revenue growth and vePENDLE adoption demonstrate strong product-market fit in the yield trading vertical.