Introduction

The Pendle team was founded in mid-2020, during a time when we were exploring how to introduce fixed-rate yields into the wild APYs of the DeFi summer. Five years may seem like an eternity in the crypto world, yet this period has passed in the blink of an eye.
I am proud of the achievements and challenges we’ve overcome so far, and we are now poised to continue our growth trajectory. With years of accumulated expertise and experience, we are in a unique position to capture new opportunities as the industry evolves.
This article will outline the following:

• Pendle milestones in 2024

• The three pillars of Pendle

• V2 upgrade

• Building “Citadels”

• The new Boros project

• Our ultimate vision

2024 Pendle V2 Highlights

Establishing the Fixed Income Market

2024 marks a milestone year for Pendle. We have validated the strong demand for fixed income and proven that the protocol can scale from millions to billions.

In early 2023, our Total Value Locked (TVL) was $230 million. By the end of 2024, it soared to $4.4 billion, a 20x increase. The growth in trading volume has been even more impressive — daily trading volume skyrocketed from $1.1 million in 2023 to $96.4 million in 2024, an almost 100-fold increase. As trust in the protocol has grown, it’s common to see users holding PT positions worth over $100 million.

On June 26, 2024, we completed the largest expiration position settlement in Pendle’s history: Pendle seamlessly settled $3.8 billion worth of expiring positions in just a few days.

Measured by TVL, Pendle’s scale is enough to make it the fifth-largest blockchain, after Ethereum, Solana, Tron, and BNB Chain.

Pendle has proven its value.

Today, Pendle’s TVL and trading volume are among the blue-chip DeFi protocols. We now hold more than half of the “yield” protocol share on DefiLlama.

In 2024, we can confidently declare that Pendle has not only established yield trading as an independent sector but has also made it one of the largest fields in the DeFi ecosystem.

The DeFi Engine

In 2024, Pendle launched nearly 200 multi-asset, multi-term liquidity pools across 5 different blockchains, averaging 4 new markets every week. By December 2024, at the peak, we operated 121 active markets, a 2.5x increase from the previous year.

But this isn’t just about scale. These markets have become core hubs for other projects to build deep liquidity.

Pendle has become the launch engine for emerging sectors and protocols.

It has proven that Pendle is not just a liquidity hub for protocols but a cornerstone of growth across the entire DeFi ecosystem. At its peak, 48% of Ethena’s TVL came from Pendle; in the BTCfi ecosystem, 42 out of every 100 re-staked BTC were deposited via Pendle. Usual’s scale skyrocketed from $300 million to a peak of $1.2 billion, with about 30% of that growth driven by Pendle.

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

Pendle’s PT (Principal Token) itself has developed into a $1.2 billion secondary economy, accounting for 3.3% of the total collateral in EVM chain lending markets. Approximately 20% of Morpho’s platform deposit assets come from Pendle.

Where there are yields, there’s Pendle.

Over the past year, we’ve made significant strides in turning Pendle into a top-tier yield trading platform. But our mission is far from complete — the journey continues.

Three Pillars of Global Expansion

V2 Version Upgrade

The on-chain annual yield market is approximately $17.7 billion, with only 4.97% ($880 million) of the yield being tokenized and made tradable (i.e., “Pendled”) through Pendle. While Pendle has firmly established itself, the market continues to expand, and the untapped yield potential far exceeds our current coverage.

We still have a long way to go in achieving our goal of “mastering the yield layer,” but the journey has begun.

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

1. Open Ecosystem

The protocol is inherently permissionless. Multiple third-party protocols have already deployed liquidity pools on Pendle via external development. We will open up this functionality through the UI, allowing more participants to leverage Pendle’s technology to create yield markets on their own. This dual-track strategy—community-driven, permissionless token listings for growth, combined with strategic curation from the business team—will aid Pendle’s scaling efforts.

2. Dynamic fees

Fee optimization will be a major 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 liquidity pools remain in an optimal state despite interest rate fluctuations.

3. vePENDLE Improvements

The functionality of vePENDLE will go beyond weekly on-chain voting, opening participation channels to all users (regardless of scale). Optimizing the vePENDLE holder interaction process will also be a core goal across all business lines (further explained below).

Currently, V2 has withstood the test and will continue to serve as Pendle’s core tool in conquering the DeFi yield market. Based on existing achievements, we will push forward with even more aggressive and grand strategies to expand the product this year.

With this, we move towards our next vertical—building “Citadels” as strategic outposts for the next generation of users.

Building “Citadels”

In 2024, Pendle achieved a billion-dollar scale. Now, our goal is a trillion-dollar scale.
Currently, Pendle serves only DeFi users within the EVM ecosystem. While the EVM market is large and performs well, we believe Pendle should not be confined to this space. The “Citadel” plan aims to break these boundaries.
Where there are yields, there is Pendle.

Our goal is for Pendle to be at the core of any interaction with the DeFi yield layer, regardless of how users engage.

Currently, Pendle V2 covers only about 5% of the DeFi yield market but has already become one of the largest protocols. The rate derivatives market, however, has a market size of $558 trillion—3,000 times larger than the current yield market. If “Citadels” can capture just a tiny portion of this, Pendle will achieve exponential growth.

We are exploring and advancing three “Citadel” initiatives:

1. Expanding PT (Principal Token) to Non-EVM Ecosystems

The first “Citadel” outpost will drive the expansion of PT into non-EVM ecosystems.

Solana, TON, HYPE, and other non-EVM chains experienced explosive growth last year, attracting millions of potential users. By offering a one-click fixed yield entry into these ecosystems, Pendle will quickly capture opportunities that were previously out of reach and welcome a new wave of users.

2. PT in Traditional Finance (TradFi)

The second “Citadel” will focus on regulatory-compliant products, packaging yield for regulatory institutions, and creating distribution channels that allow traditional financial institutions to access the best crypto-native fixed yields.

We will collaborate with partners like Ethena to launch independent Special Purpose Vehicles (SPVs) managed by compliant asset management firms, giving traditional financial clients access to Pendle.

3. PT Compliance for Islamic Funds

Similarly, Pendle will create a “Citadel” that is compliant with Shariah principles. Islamic finance is a $3.9 trillion global market covering over 80 countries. In the last decade, Shariah-compliant financial products have grown explosively at an annual rate of 10%. \

New Project: Boros

The Power of Disruption

As builders who have weathered multiple market cycles, we understand the industry’s dynamics—memes and protocol development will always ebb and flow. But blockchain technology continues to set new highs with each cycle, and now is the perfect time to break through technological boundaries.

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

Boros is the application we envision: using blockchain to accomplish what traditional finance cannot.

Anchoring the Largest Yield Sources

As the largest yield platform, we have witnessed the explosive demand for yield trading. Pendle V2’s yield market has already shown immense growth potential, driven by the market’s general demand for yield hedging and speculation.

Boros takes this vision to new heights. It supports all types of yields—whether DeFi, CeFi, or traditional financial markets’ LIBOR rates or mortgage rates—allowing Pendle to vastly expand market coverage and create new yield opportunities.

Boros’ first target is the largest yield source in the crypto market—funding rates.
The perpetual futures market has an average open position of $150 billion, with funding rates flowing every second in the 24/7 market; daily trading volume is $200 billion, 10 times that of the spot market. The yield potential here far surpasses the current spot market of V2.

Through Boros, Ethena will gain absolute control and predictive ability over funding yields, locking in fixed funding rates to ensure the stability of large-scale operations.

Boros achieves interest rate trading by replacing the floating yield stream of underlying assets with a fixed yield stream (and vice versa) until maturity.

Another typical use case is the TRUMP contract on perpetual DEXs, where long holders must pay a funding rate of up to 20,000% APY, eroding short-term profits. Boros offers a solution: TRUMP/USDT perpetual traders can hedge to convert floating funding rates into fixed payments.

Conversely, traders executing current loan arbitrage strategies can lock in high yield opportunities to secure fixed returns.

Boros establishes a new standard for funding rate interactions by providing powerful yield control and optimization tools.

How PENDLE Fits into This Vision

Where there are yields, there is Pendle.

As the ecosystem expands, the value created by the protocol through V2, “Citadels,” and Boros will flow into vePENDLE.

In 2024, active vePENDLE holders were the biggest beneficiaries of Pendle’s growth. The average annualized yield is around 40%, with the $6.1 million airdrop distributed in December excluded.

Ultimate Vision

When Pendle was first established, our vision was clear: to become the leading yield trading protocol. This goal remains unchanged, but our mission has scaled alongside our business growth.
Pendle is committed to becoming the ultimate gateway for users to interact with yields.
Whether it’s crypto-native enthusiasts or Middle Eastern sovereign wealth funds, Pendle will serve as the entry point for all types of yield interactions. From DeFi to CeFi, we provide the protocols, interfaces, and tools to empower the full yield journey.

The 2025 roadmap includes bold innovations, with “Citadels” and Boros being two entirely new verticals. We understand that not all plans will execute perfectly. When we face obstacles, we will adjust strategies, reassess, and pave new paths—just as we have done in the past years.

The market in 2025 will be noisy and turbulent, filled with distractions and panic. During this time, we will stay anchored to our mission: expanding V2, driving PT distribution to new heights, and unlocking Boros’ potential. Instead of competing on others’ tracks, we will focus on our set goals and push forward with unwavering determination.

Looking far ahead and overcoming the challenges of the moment, we are confident that Pendle is steadily advancing toward the goal of “mastering the yield layer.”

The job is not done—but it will be.

TN

CEO and Co-Founder of Pendle

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