Pendle has identified OTC-style matchmaking as an important go-to-market strategy for Boros and reports rou
Key takeaways
- Pendle has identified OTC-style matchmaking as an important go-to-market strategy for Boros and reports roughly $200M+ open interest and $50M–$100M daily trading volume while facilitating large trades by matching counterparties to settle on Boros.
- Pendle V2 usage is becoming more institutional, with funds roughly in the $30M to $500M AUM range participating, and PT is described as more appealing to bigger funds while YT is more attractive to sophisticated retail/speculators.
- Pendle found that bribing and liquid locker dynamics caused over 50% of weekly emissions to flow to the bottom 10% of fee-generating pools, which it views as inefficient emissions usage.
- Pendle plans to allocate 80% of relevant protocol revenue to buyback-and-distribute and 20% for expenses and ecosystem growth, consistent with its prior 80/20 user-versus-non-user fee split.
- Pendle’s protocol revenue is primarily driven by swap fees rather than revenue share tied to TVL.
Sections
Boros Product: Funding-Rate Hedging, Early Traction, And Risk Controls
Boros is presented as a rates/funding instrument used to swap between fixed and floating exposures, with early adoption by sophisticated traders and a GTM approach including OTC-style matchmaking. The corpus provides traction snapshots (open interest and daily volume) and describes cautious leverage increases informed by observed liquidation events and market behavior; revenue routing to the token is stated as intent but not finalized.
- Pendle has identified OTC-style matchmaking as an important go-to-market strategy for Boros and reports roughly $200M+ open interest and $50M–$100M daily trading volume while facilitating large trades by matching counterparties to settle on Boros.
- Pendle has not finalized how to utilize Boros-generated revenue; for now it goes to reinvestment until Boros demonstrates strong product-market fit and healthy revenue, with stated intent that Boros revenue will eventually accrue to the PENDLE token.
- Boros has launched funding-rate markets for BTC and ETH, added BNB, and recently launched an Nvidia equities-perp market with conservative risk parameters; there are potential future plans to add gold markets.
- Pendle believes equities perps will grow significantly this year and views Boros as a tool to mitigate highly volatile equities-perp funding rates that deter participation.
- Boros has experienced liquidation events and Pendle is increasing allowed leverage cautiously, guided by whether organic orders quickly arbitrage funding-rate dislocations and by increased confidence from observing more market events over time.
- Boros is currently around $200M in open interest and Pendle reports trading activity has recently picked up.
Distribution Strategy And Institutional Adoption Constraints
The corpus claims success in cross-chain and venue distribution, including concrete peak distribution magnitudes on money markets. In contrast, institutional/TradFi-focused initiatives are described as limited by compressed yields and insufficient yield premium relative to perceived smart-contract risk; expansion interest includes Solana and broader yield sources in 2026, but without concrete execution details.
- Pendle V2 usage is becoming more institutional, with funds roughly in the $30M to $500M AUM range participating, and PT is described as more appealing to bigger funds while YT is more attractive to sophisticated retail/speculators.
- Pendle is interested in broad distribution including Solana and expects more meaningful Solana-related development this year.
- At peak, PT asset distribution included about $6B TVL on Aave and over $1B on Morpho (and similarly on Euler).
- The team believes institutions generally will not take smart-contract risk for tokenized yields unless the yield is significantly higher than traditional alternatives.
- Pendle believes the incremental yield premium in DeFi is often only about 50 basis points, which it views as insufficient to motivate a move from existing infrastructure.
- Pendle says the Citadels distribution strategy has been largely successful, emphasizing cross-chain distribution and broader venue adoption.
Tokenomics Regime Shift: Vependle To Spendle
The deltas describe a shift away from a lock-based vote-and-bribe governance/incentive system toward a design intended to fit larger scale conditions. The stated drivers are reduced marginal importance of boosted yields, lockup friction for some funds, and emissions misallocation linked to bribes and liquid lockers.
- Pendle found that bribing and liquid locker dynamics caused over 50% of weekly emissions to flow to the bottom 10% of fee-generating pools, which it views as inefficient emissions usage.
- Pendle observed that boosted yield from vePENDLE has become less important because organic demand and trading activity now often drive pool APY without needing boosts.
- The vePENDLE lock requirement of one week to two years prevented some liquid funds from participating because their mandates disallow such lockups.
- Pendle is transitioning its tokenomics from vePENDLE to sPENDLE because the protocol is operating at a larger scale where vePENDLE is no longer the best fit.
- Under vePENDLE, three core functions were boosting LP APY to bootstrap liquidity, directing weekly incentives via votes, and sharing fees to voters pro-rata based on the pools they vote for.
- Pendle initially adopted a ve-model partly to mirror Curve’s success and partly to require token holders to do governance work in exchange for rewards, which it viewed as prudent in a less supportive regulatory environment at the time.
Value Accrual Change: Stablecoin Distribution To Buyback-And-Distribute
The corpus reports a move from distributing revenue in USDC to using revenue for PENDLE buybacks and distributing purchased tokens to stakers, with an 80/20 split between user accrual and expenses/ecosystem. The rationale emphasizes converting protocol traction into token buy demand and preserving governance/incentive optionality by distributing rather than burning.
- Pendle plans to allocate 80% of relevant protocol revenue to buyback-and-distribute and 20% for expenses and ecosystem growth, consistent with its prior 80/20 user-versus-non-user fee split.
- Under sPENDLE, protocol revenue that was previously distributed in USDC will instead be used to buy back PENDLE and distribute it to sPENDLE stakers.
- Pendle’s stated rationale for buybacks is to translate protocol traction into token buy demand, referencing Hyperliquid’s buyback model as a successful precedent.
- Pendle chose buyback-and-distribute rather than buyback-and-burn to preserve governance participation and retain optionality to use tokens for incentives during growth stages.
Unit Economics Focus: Swap Fees And Capital Efficiency Over Tvl
The deltas reframe performance around trading activity, emphasizing that protocol revenue is primarily swap-fee-driven rather than TVL-driven. Product levers mentioned include reliance on limit orders and other planned changes aimed at increasing fees per unit of TVL and reducing reliance on TVL as the main metric.
- Pendle’s protocol revenue is primarily driven by swap fees rather than revenue share tied to TVL.
- Pendle aims to increase trading activity and TVL efficiency so the same TVL generates more swap fees.
- Pendle performance markets now rely heavily on limit orders to drive trading activity.
- Pendle has additional planned improvements intended to further reduce reliance on TVL as the core performance metric.
Watchlist
- Pendle will soon replace vote-based pool emissions with a more algorithmic emissions methodology that targets pools with proven trading activity and sustained liquidity deposits, with a small discretionary overlay for strategically important sectors such as RWA.
- Pendle is interested in broad distribution including Solana and expects more meaningful Solana-related development this year.
Unknowns
- What are the exact mechanics of sPENDLE (staking/withdrawal rules, eligibility, governance rights, and any lockup or cooldown constraints)?
- What is the concrete implementation for buyback-and-distribute (buyback cadence, on-chain transparency, distribution schedule, and eligibility edge cases)?
- When will vote-based emissions be replaced, and what exact algorithmic criteria and parameters will be used (including the scope of discretionary overlays)?
- What measurable changes (if any) occur in emissions-to-fees allocation after the emissions redesign?
- How will Boros revenue be defined, measured, and eventually routed to accrue to the PENDLE token (and on what timeline or thresholds)?