Pendle Targets Wider Adoption With sPENDLE Governance Upgrade

TLDR

• Pendle replaces vePENDLE with sPENDLE to expand access and reduce governance friction.
• sPENDLE adds liquid staking, transferability, and optional instant exits with fees.
• Up to 80% of protocol revenue will fund PENDLE buybacks and governance rewards.
• vePENDLE holders receive temporary boosted sPENDLE during a phased migration.
• New emissions model cuts output by 30% and targets pools with real demand.

Pendle began a major tokenomics overhaul as it prepared to replace vePENDLE with sPENDLE to expand participation and improve efficiency. The protocol confirmed a phased transition that aims to simplify governance and reduce friction across its ecosystem. Moreover, sPENDLE will serve as the new liquid staking and governance asset and support wider composability.

sPENDLE Model Introduces Liquidity and Flexible Governance

Pendle introduced sPENDLE to remove barriers created by vePENDLE and to support a more open framework. The protocol highlighted that sPENDLE provides liquid staking with a 14-day withdrawal period and optional instant redemption with a fee. This model offers fungible and transferable features that allow broader DeFi use.

sPENDLE will also become the primary governance token and will guide future upgrades in a streamlined structure. Holders will maintain reward eligibility unless they ignore a live governance proposal, which is called a PPP. This approach aims to keep participation simple while upholding protocol oversight.

The protocol will direct up to 80% of revenue toward PENDLE buybacks that will then fund governance rewards. sPENDLE will also receive rewards from ecosystem fees as part of the new model. The upgrade intends to expand usage while sustaining long-term revenue alignment.

Transition From vePENDLE Begins With Snapshot and Lock Pause

The protocol will pause new vePENDLE locks on January 29 as it prepares the ecosystem for sPENDLE migration. A snapshot of all vePENDLE balances will support the transition and determine special boosts for holders. After that step, Pendle will launch sPENDLE governance in full.

Current vePENDLE users will receive boosted sPENDLE balances based on remaining lock duration to maintain fairness. The boost will start at 4x for maximum remaining terms and decline until each lock expires. Moreover, this boost will serve as a temporary measure that preserves user position throughout the transition.

Pendle confirmed that boosted sPENDLE is non-transferable and will phase out fully within two years. The protocol expects sPENDLE to become the only governance token once this period ends. Additionally, LP reward boosts tied to vePENDLE will continue only for existing pools until maturity.

Tokenomics Shift Seeks Better Efficiency and Broader Use Cases

Pendle stated that vePENDLE created efficiency challenges due to long locks, non-transferable design, and weekly voting demands. Platform revenue grew over the past two years, yet only a small share of users engaged because of complexity. The team designed sPENDLE to reduce friction and improve capital use.

sPENDLE allows integration with other DeFi protocols, which enhances interoperability and strengthens restaking potential. It also resolves constraints that limited previous reward distribution and contributed to low participation rates. Additionally, this integration shift could extend Pendle’s reach across external platforms.

Pendle will introduce an algorithmic emissions model that reduces output by about 30% and improves allocation accuracy. This framework will direct emissions to pools with measurable performance needs rather than rely on manual voting. Moreover, the protocol expects this approach to increase sustainability and align incentives across its markets.

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