Pendle

Pendle is a protocol for tokenizing and trading future yield. It takes an interest-bearing asset and splits it into two separate tokens: a principal token representing the underlying asset at maturity, and a yield token representing the income that asset will generate until then.

That separation creates a market for yield itself. Someone who wants predictable returns can buy the principal token at a discount and redeem it for the full underlying amount at maturity, locking in a fixed rate. Someone who expects yields to rise can buy the yield token, gaining leveraged exposure to future rates without holding the principal.

The automated market maker

Trading these tokens requires a pricing mechanism that handles time decay, since a yield token approaches zero value as maturity nears. A standard automated market maker would misprice this badly and create constant losses for liquidity providers. Pendle built a custom market maker designed for assets with a defined maturity, which is the technical foundation the rest of the protocol depends on.

The protocol became especially prominent during periods of high activity in liquid staking and restaking, where users wanted to trade or lock in points and yields from those positions.

Supply and governance

PENDLE has no fixed maximum supply. Total supply currently sits at roughly 281.5 million tokens with around 172 million circulating, with ongoing emissions that decline over time under the protocol's schedule.

Governance uses a vote-escrow model: holders lock PENDLE to receive vePENDLE, which directs emissions across pools, earns a share of protocol fees, and boosts the holder's own liquidity rewards. That is the same mechanism Curve introduced, applied to yield markets.