Pendle Unveils sPENDLE In Major Overhaul Of Its Token Model

Pendle is entering a decisive new phase. The yield-trading protocol has officially unveiled sPENDLE, a liquid staking token designed to replace the long-standing vePENDLE governance lock model.

The change marks one of the most significant structural upgrades in Pendle’s history, shifting the protocol away from rigid long-term lockups toward a more capital-efficient, revenue-aligned token economy.

The announcement, shared by Pendle on X, confirms that sPENDLE will become the new core alignment mechanism for the ecosystem. Instead of forcing users into multi-year lockups, the protocol introduces a 14-day withdrawal period, automated emissions, and a buyback-driven reward system funded by real protocol revenue.

Pendle describes the move as a transition from growth-at-all-costs tokenomics to a structure focused on efficiency, sustainability, and direct value capture.

Liquid Staking Replaces Rigid vePENDLE Lockups

At the center of the upgrade is the replacement of vePENDLE with sPENDLE, a liquid staking asset that removes the requirement for long-term capital commitment. Under the previous system, users had to lock PENDLE for up to four years to gain governance power and emissions influence. While effective in retaining liquidity, the model introduced significant friction and capital inefficiency.

With sPENDLE, Pendle introduces a fixed 14-day unstaking period, dramatically lowering the barrier to participation. Staked PENDLE becomes transferable, composable, and usable across DeFi, transforming it from a static governance lock into a yield-bearing productive asset.

This design change is especially relevant for institutional and systematic participants who operate under liquidity mandates. A two-week exit window, compared to a multi-year lock, significantly reduces operational risk and unlocks a broader pool of potential capital.

As one analyst noted, the shorter and predictable unstaking period meaningfully lowers friction for larger players while preserving alignment incentives.

Protocol Revenue Shifts To Buyback And Redistribution

Another core pillar of the sPENDLE model is how Pendle handles protocol revenue. Instead of the existing fee-sharing approach, the protocol will now redirect up to 80% of revenue toward buying back PENDLE from the open market.

These repurchased tokens are then redistributed directly to eligible sPENDLE holders, creating a yield stream backed by real usage rather than inflationary emissions. The buyback mechanism applies to revenue generated by Pendle V2 and may expand to additional products such as Boros in the future.

This shift creates a fundamentally different reward flywheel:

•  Revenue grows → buybacks increase
•  Buybacks reduce circulating supply
•  Rewards flow to aligned stakers
•  Inflation pressure decreases

By anchoring rewards to protocol revenue, Pendle moves toward a non-inflationary, usage-aligned token model. Instead of emitting tokens to subsidize growth, the protocol uses real economic activity to reward long-term alignment.

Supporters argue this approach strengthens sustainability and closes the feedback loop between usage and value accrual.

Algorithmic Emissions Replace Manual Gauge Voting

Pendle is also retiring one of the most complex and controversial components of veToken systems: manual gauge voting. Under vePENDLE, holders voted on emissions allocation across pools, often leading to inefficient capital deployment and a thriving “bribe” economy.

The new sPENDLE system introduces an algorithmic emission model that automatically allocates incentives based on pool performance and efficiency. According to Pendle, this change is expected to reduce PENDLE emissions by approximately 30% while improving incentive ROI.

The inefficiencies of the old system were significant:

•  Roughly 60% of pools were net negative, earning fewer fees than incentives emitted
•  Voting behavior often optimized for bribes rather than protocol health
•  Inflation pressure remained higher than necessary

With algorithmic allocation, Pendle aims to direct emissions where they generate the most economic value, eliminating waste and improving long-term sustainability.

An independent breakdown highlighted that this redesign directly targets one of the biggest weaknesses of veToken models: poor incentive efficiency at scale.

Legacy vePENDLE Holders Receive Boosted Conversion

To ease the transition, Pendle is converting existing vePENDLE positions into boosted sPENDLE. The boost, up to a 4x multiplier, is determined by the remaining lock duration at the time of the snapshot.

This ensures that long-term supporters who committed capital under the old model are not penalized. Instead, they retain enhanced exposure under the new system, preserving alignment while moving into a more flexible structure.

By honoring existing commitments while modernizing the framework, Pendle aims to minimize disruption and maintain trust during the transition.

Three Core Value Drivers Behind sPENDLE

Pendle’s redesign unlocks three major value drivers that fundamentally reshape the token’s role.

First, transferability and composability. sPENDLE remains liquid and usable across DeFi, unlocking productivity that was impossible under vePENDLE. Staked PENDLE becomes a capital-efficient asset rather than dead weight locked for governance.

Second, direct fundamental value capture. The buyback-and-redistribute mechanism ties rewards to real revenue, making the system sustainable and non-inflationary. Value flows from protocol usage directly to aligned stakers.

Third, significant emission reduction. By cutting emissions by roughly 30% and optimizing allocation, Pendle improves supply-side dynamics while fixing incentive inefficiencies that plagued the old model.

Together, these changes create a cleaner, healthier token economy designed for Pendle’s current stage, not its early growth phase.

A High-Conviction Pivot With Real Trade-Offs

Despite the advantages, the shift to sPENDLE is not without risk. By dismantling the bribe-driven “Pendle Wars” and removing long-term locks, Pendle gives up a powerful defensive moat that kept liquidity sticky.

In its place is a more fluid, capital-efficient system that may attract mercenary capital, funds that can exit quickly during downturns. The protocol is effectively betting that superior efficiency, real yield, and deflationary buybacks will outweigh the stability of enforced lockups.

This is a high-conviction bet. Pendle is choosing scalability and economic clarity over guaranteed retention, aligning itself with a future where token value is driven by fundamentals rather than coercive mechanics.

Pendle Signals A New Phase Of Token Maturity

The launch of sPENDLE signals that Pendle believes it has outgrown growth-at-all-costs tokenomics. With the protocol now operating in a steady state compared to its early V2 days, the focus shifts toward refining capital efficiency and maximizing long-term value capture.

Only a handful of protocols reach this stage. Pendle’s redesign positions the token itself, not just the product, as the next frontier of optimization.

Whether this bold transition succeeds will depend on execution, adoption, and how markets respond to the removal of old incentives. But one thing is clear: sPENDLE represents a decisive pivot toward a more efficient, revenue-aligned, and institution-friendly future for Pendle.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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