Author: TechFlow
The birth of a unicorn is often due to the discovery of a market with huge but long-term unsatisfied demand, such as Pendle, the largest revenue trading platform.
When the global interest rate derivatives market has exceeded one trillion US dollars in size, the interest rate swap market in the crypto market is still almost in its infancy. As a serial entrepreneur in the crypto industry, TN Lee and his team keenly captured this market gap, and Pendle, which focuses on yield trading, came into being. In 2024, the TVL achieved a 20-fold increase, becoming the absolute leader in the crypto financial yield trading track.
As crypto regulation becomes clearer, tariff trade wars gradually escalate, and large-scale institutional influx further pushes 2025 to become an important turning point in the development of on-chain finance, Pendle, under the general trend, has also ushered in a new proposition of how to integrate market opportunities into product functions and achieve a new round of accumulation and development.
However, from the roadmap planning article "Pendle 2025: Zenith" released by Pendle at the beginning of the year, through a series of initiatives such as future product optimization, Citadels fixed income expansion plan and new product Boros, we can also get a glimpse of Pendle's grand plan to create an integrated income interaction gateway from on-chain to off-chain, from DeFi to CeFi to TradFi in the new cycle.
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When the impetuousness of short-term speculation fades and market attention begins to shift to long-term value, can Pendle, which aims to bring easier participation, more efficient capital flow and richer returns through new products, continue to advance?
Let’s follow the Pendle product team’s plan and work together to clear the fog and see the truth.
In the traditional financial field, the interest rate derivatives track where Pendle is located is a very mature market, and its scale is far beyond our imagination:
According to the "OTC derivatives statistics at end-June 2024" report released by BIS (Bank for International Settlements), the scale of interest rate derivatives (IRD) is approximately US$57.9 trillion, making it the largest component of the derivatives market.
In the interest rate derivatives market, the interest rate swap market is the largest and most liquid important component.
But in the field of crypto finance, the situation is just the opposite: according to DeFi Pulse data, the interest rate swap market accounts for less than 10% of the DeFi market.
Faced with this huge gap, interest rate swaps are recognized as a sub-segment of DeFi with huge growth potential. Pendle, which focuses on interest-bearing assets, fills the gap in the interest rate swap market in crypto finance and has achieved exponential growth in the past year:
According to DeFi Llama data, Pendle TVL was approximately US$230 million on January 1, 2024, and approximately US$4.4 billion on December 31, 2024, an increase of approximately 20 times. During this period, Pendle TVL even reached a peak of US$6.7 billion.
In addition, according to the data report released by Pendle, Pendle's average daily trading volume increased from US$1.1 million in 2023 to US$96.4 million in 2024, an increase of nearly an astonishing 100 times.
While TVL and transaction volume remain the leaders in DeFi revenue trading, Pendle has also demonstrated its important role in refreshing the project appearance, bringing stronger liquidity and more attractive returns through its cooperation with major projects:
According to Pendle data statistics, in 2024, Pendle launched 200+ Markets with 60+ protocols on 5 mainstream blockchains, including Arbitrum, Zircuit, Arbitrum, etc., of which 48% of Ethena TVL was attributed to Pendle; 39% of Arbitrum TVL was due to Pendle; what's more, for every 100 BTC pledged in BTCFi, 42 were deposited through Pendle.
We can also gain insight into Pendle’s absolute leadership in the yield market through the “Breakthrough DeFi Markets” report released by Binance Research in May 2024. The report shows that the yield market TVL increased by 148.6% to $9.1 billion. This growth curve is highly consistent with Pendle’s outbreak.
After achieving outstanding results, the more difficult question is: how to continue to make rapid progress in the face of the future?
As Pendle co-founder TN Lee said: Even though Pendle has become one of the top ten DeFi protocols and has become the largest on-chain yield trading platform, Pendle's trading volume in 2024 will only account for 0.007% of global interest rate swap trading volume.
2025 is a year of both opportunities and challenges. From a DeFi micro perspective, according to Pendle data, the on-chain yield market generates approximately $17.7 billion in revenue each year, of which only 4.97% is realized through Pendle. This gives Pendle the first impetus to continue to cultivate the DeFi yield market and maintain rapid growth.
From a global economic macro perspective:
On the one hand, as the United States, an important economic center in the world, implements measures including establishing a strategic crypto reserve, overturning the IRS DeFi broker rules, and accelerating the establishment of a comprehensive stablecoin regulatory bill, crypto finance will usher in a clearer and more open regulatory framework. Driven by compliance, more institutions will bring more funds and users to the chain, bringing important development opportunities to Pendle, the largest revenue trading platform on the chain.
On the other hand, the continuous escalation of the tariff trade war has brought more uncertainty to the market, giving rise to huge demand among investors for a combination of stable assets (i.e. fixed prices) + fixed income. The fixed income strategy of stablecoins is an important part of this. Compared with the fixed annualized rate of return of about 3% for stable investment products in traditional finance, the rate of return of similar products of Pendle can reach 8-12%, which further brings growth opportunities for Pendle.
As a yield trading platform praised by crypto OGs, on-chain smart money, and DeFi veterans, how does Pendle achieve its advantage of "more efficient risk management and yield optimization"?
In 2025, when the DeFi yield market is gradually expanding and traditional finance and DeFi are merging at an accelerated pace, what specific measures will Pendle take to better attract users, funds, and traffic?
When first getting started with Pendle, some newbies may find it difficult to understand and participate. Don’t worry, let’s take a look at a case study first:
Based on this analogy, it is not difficult to understand the logic of Pendle’s “income transaction”:
Specifically: Pendle focuses on interest-earning assets, which will generate principal + income within a certain period of time.
Pendle aims to achieve separation of principal and interest: encapsulate interest-bearing assets into SY tokens to achieve standardization of interest-bearing tokens, and then SY can be split into two parts: principal token PT and income token YT, and interest rate transactions can be realized through Pendle AMM.
Hen = PT, principal token
Eggs = YT, revenue tokens
Why do we need to separate principal and return? Because the market is volatile, so the rate of return is also volatile. In the face of volatility:
The principal token PT is like a tool to help users resist market fluctuations and obtain fixed income : the price of PT tokens is lower than the original asset price, and the discount space is the fixed income space. Users who buy PT tokens usually do not think that future returns will rise, so they use PT to fix the current rate of return. Currently, the PT market size of Pendle is as high as 1.2 billion US dollars. Regardless of the market situation, PT provides users with a stable fixed income of 10% - 20% APY.
The yield token YT is a yield lever in the hands of users : users do not need to purchase the entire interest-bearing asset. Holding YT is equivalent to holding the income right of the principal. If the future income decreases, the user faces the risk of loss. If the future income increases, the user will get a higher income. Therefore, users can choose to increase or decrease their holdings of YT tokens based on their own judgment of future yields.
Let’s take the Sonic ecosystem aUSDC pool, which has recently attracted widespread community participation, as an example:
If users feel that the current rate of return is good, they can purchase PT at a discount of $0.974 through Pendle. If they hold it until it expires on August 14, 2025, they will receive 1 USDC, thus locking in a rate of return of 8.741%.
If users think that the yield will increase in the future, they can buy YT through Pendle at a price of $0.02601. Each YT is equivalent to the yield of 1 USDC principal. Buying YT is equivalent to increasing the yield leverage by 38 times, and there is no liquidation risk.
In this way, Pendle provides a tool for long and short yields by separating principal and short, bringing new gaming space. Both conservative investors and users pursuing high returns can make risk-return choices through PT and YT.
Of course, as a profit tool that is highly praised and deeply participated by crypto industry OGs, DeFi veterans, and smart money on the chain, Pendle has introduced more advanced gameplay in addition to the basic logic : such as providing PT + SY liquidity as an LP, staking and locking positions for vePENDLE to earn protocol income dividends, etc., combined with the project's points, airdrops and other series of income, it brings participants a more flexible, efficient and profitable participation experience.
Taking Pendle's Sonic pool as an example again, among the current 5 pools, the PT yield is basically between 7% and 10%. If users provide liquidity through Aave's aUSDC, the LP APY can reach 23%. More advanced users can increase leverage by purchasing YT-stkscUSD, combined with 24 times Sonic points and airdrop expectations, Rings points and Veda points income, etc., the highest APY can reach 150%.
As a DeFi yield optimization tool, Pendle has brought additional arbitrage opportunities to the Sonic ecosystem. This combination of high yield + high leverage + potential airdrops has also caused Pendle's TVL on Sonic to rapidly climb and exceed US$100 million.
There are currently many tutorials about Pendle on social media, and Pendle officials have also very considerately prepared an in-depth and easy-to-understand Chinese beginner's guide for users, answering users' questions one by one from vivid cases to specific practices, from product logic to specific logic. Interested users can click to check it out, and this article will not go into too much detail.
From DeFi, CeFi to TradFi integration: Enter the Pendle 2025 blueprint
The overall rise of on-chain finance in 2025 is not only an unprecedented growth opportunity, but also an important test for product functionality and future planning.
As a leader in revenue trading, Pendle has proposed a new vision of "all-in-one revenue trading gateway":
Pendle aims to provide tools to help anyone access, interact and participate in yield trading markets in a decentralized and permissionless manner, whether it is DeFi, CeFi or TradFi, where there is yield, there is Pendle.
Under the new vision, the trend of accelerating the integration of DeFi, CeFi, and TradFi is inevitable, and Pendle has also made a clear plan on how to realize the vision of "all-round integrated income trading gateway" through the "Pendle 2025: Zenith" roadmap planning article.
Citadels Fixed Income Expansion Plans
As one of Pendle’s business focuses in 2025, why does Citadels plan to focus on the PT fixed income market?
On the one hand, whether it is traditional finance or crypto finance, fixed income is an important part of the investment portfolio, and the fixed income market will become an important entry point for traditional financial institutions to enter the crypto market.
On the other hand, the market uncertainty brought about by the tariff impact will further increase investors' demand for fixed income. Through PT, Pendle has brought a stable and secure fixed income channel to the market, especially the stablecoin + fixed income model.
Therefore, the Citadels program mainly covers the following aspects:
The Pendle stablecoin pool not only provides investors with a more stable investment option, but also enables them to achieve higher returns than traditional finance. It is an important bridge for Pendle to attract TradFi users to enter the chain.
Currently, there are more than 35 stablecoin pools in operation on the Pendle platform, and plans to expand its coverage more actively in the coming months. In addition to Pendle's carefully planned listing projects, stablecoin projects can also easily build their own income and points market through its upcoming permissionless listing portal, making Pendle the preferred center for stablecoin income.
We know that currently Pendle only serves DeFi users in the EVM ecosystem. There are still a large number of active users and markets outside the EVM ecosystem that are not covered. Therefore, in the future, Pendle will focus on the non-EVM ecosystem through the Citadels plan. In the future, Pendle will provide support for non-EVM ecosystems including Solana and TON, and further increase its market share in the interest rate swap track by covering non-EVM ecosystem users.
Compliance is the primary consideration for institutions to actively participate in on-chain finance. Pendle will launch a compliant PT through the Citadels program to bring the best crypto-native fixed income solutions to traditional financial institutions.
Previously, Pendle has announced cooperation with partners such as Ethena to jointly launch an independent SPV managed by a compliant asset management institution in the future, aiming to further open up Pendle access to traditional financial clients.
Fasanara Digital’s adoption of the Pendle Fixed Income Suite is a significant achievement in the efficient advancement of Citadels’ plans: Fasanara Digital is the digital asset arm of asset management firm Fasanara Capital, which has $4.5 billion in assets. By providing deep liquidity, a diverse selection of structured products, and high-yield services, Pendle’s influence will further radiate to more institutional partners.
In addition, Pendle will also create a Citadel that focuses on complying with Shariah principles, aiming to achieve on-chain compliance of Islamic funds through PT. The Islamic financial system is a global market with a capital scale of more than 3.9 trillion US dollars and covering more than 80 countries. Based on cooperation with Islamic funds, Pendle will focus on creating PT products that comply with Shariah principles in the future, further promoting Pendle's penetration in the global financial market.
Under the growth strategy of multi-dimensional market expansion, a paradigm-level yield trading product that combines high-quality yield trading experience and deeply integrates DeFi, CeFi, and TradFi is also being developed.
It is Boros.
There has been a lot of discussion in the community about the upcoming Boros, and many people believe that Boros may be Pendle's most important product release in 2025.
Why do you say that?
The arguments come from many aspects, one of the important reasons is:
As mentioned at the beginning of the article, the explosive growth of a product is often due to the discovery of a market with huge but long-unsatisfied demand, and Boros is targeting the funding rate market.
This is indeed a huge market . Previously, Pendle mainly focused on the spot market, while the perpetual market has advantages such as high leverage, high flexibility, and high liquidity. Its scale is dozens of times that of the spot market. The funding rate based on the perpetual market has become the largest source of income in the crypto market. Boros' focus on funding rates will undoubtedly bring Pendle dozens of times of future growth space.
This is indeed a market with huge room for optimization . Funding rates often have strong volatility, which is why funding rates are often seen as an intuitive indicator of market sentiment. High volatility brings greater uncertainty, and in extreme cases it will greatly reduce traders' profit margins.
I believe everyone has not forgotten the extreme FOMO sentiment in the market brought about by the emergence of $TRUMP Meme. When $TRUMP was launched on the perpetual contract platform, some traders even paid an annualized funding rate of up to 20,000% to maintain long positions.
Previously, there was no reliable way to hedge against large-scale funding rates in the market, and now Boros aims to bring a new solution.
Boros starts from the perspective of funding rates, making funding rates tradable in the most reliable and transparent way, while providing users with more rigorous risk control and more diverse trading strategy options.
Specifically, Boros converts floating funding rate payments into fixed payments by tokenizing future funding rates and trading them in the market, while at the same time bringing more opportunities to traders executing cash and arbitrage strategies.
Taking $TRUMP as an example, users can fix the current funding rate by trading the tokenized funding rate to cope with the extreme FOMO market.
Another more intuitive example is Ethena: Ethena's important source of income is the funding rate through perpetual contracts. If it is unable to take effective measures to control the volatility of the funding rate, it will have a significant impact on its business development. In this case, Ethena can choose to hedge the risk of falling funding rate income through Boros's tradable funding rate, and more active users can also take advantage of the floating funding rate to double their income in a leveraged manner.
For protocols and users such as Ethena that rely on funding rate income, Boros is an effective solution for risk management.
Under Pendle's new vision of "all-in-one income trading gateway", Boros is an important bridge connecting DeFi, CeFi, and TradFi, and is also an effective carrier for on-chain and off-chain funds and users.
Guided by the principle of "where there is yield, there is Pendle", Boros aims to break the boundaries of DeFi in the future and support any type of income including DeFi, CeFi, TradFi financial market LIBOR interest rates or mortgage interest rates.
As a paradigm-level product for revenue trading, Boros combines all the advantages of blockchain technology, such as decentralization, openness, transparency, and efficiency, and can achieve functions that traditional finance cannot achieve. This will further solve problems such as insufficient liquidity, low transparency, and closed markets, and attract extensive participation and deep integration of traditional finance on the chain.
According to the latest roadmap of the Pendle team, Boros will be available to everyone soon in mid-2025. With the launch of Boros, Pendle will receive more funds, achieve exponential growth in users, and promote the development of on-chain finance into a new stage.
Of course, in addition to horizontal expansion, Pendle is also committed to further improving the product experience through continuous product iteration, creating more permissionless participation, a more open market, and a better yield trading experience, making basic preparations for Pendle to take on large-scale funds and users.
The lack of permission is a major advantage of DeFi compared to traditional finance, bringing greater transparency, freedom, openness and composability. Pendle aims to continue to expand this advantage by opening up permissionless fund pool deployment, supporting anyone and any protocol to deploy their own yield market based on Pendle. Previously, Pendle has launched the "Community Launch" function to further bring community-driven growth.
Dynamic rates are also a focus of Pendle's product optimization: by optimizing the dynamic fee rebalancing mechanism, it ensures that the funding pool can always be in the optimal state during interest rate fluctuations, further ensuring a healthy balance between LPs, users and protocols.
At the same time, we know that Pendle adopts the ve model design, $PENDLE is its utility token, $vePENDLE is its governance token, and $vePENDLE holders can vote to decide which liquidity pools the $PENDLE rewards will flow to, thereby deriving bribery platforms such as Penpie and Equilibria, thereby bringing multiple benefits such as basic APY, voting APY, and LP rewards to $vePENDLE holders.
In the future, Pendle will also promote the improvement of vePENDLE. The functions of $vePENDLE will open participation channels to all users (regardless of size), build a more open ecological participation, and expand the important role of $vePENDLE as an ecological flywheel.
I believe everyone has felt this: in the past very impetuous bull market cycle, most projects chased short-term hot traffic one after another, and most users were immersed in the rhythm of fast in and fast out. There were not many projects that truly focused on long-term value and presented valuable products.
Before the regulation becomes more friendly and institutions actively participate in promoting the overall growth of on-chain finance, projects such as Pendle, which have rigorous products, impressive growth, and clear future plans, may, in a large sense, not only be the source of many users' firm market beliefs, but also perhaps one of the opportunities to push the industry from FOMO to rationality and from short-term speculation to long-term value.
From the optimization of its product series, the advancement of the Citadels plan to the upcoming new product Boros, will Pendle be able to use the income from interest-bearing assets as a starting point and quickly grow into a new path connecting DeFi, CeFi and TradFi?
As the Pendle team often says:
Job's not done, but it'll be.
As Pendle's 2025 roadmap is gradually implemented, let us look forward to the return of value-oriented thinking and the explosion of on-chain finance driven by Pendle.
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