Pendle has evolved from a yield-focused protocol into a cornerstone of decentralized finance (DeFi), transcending its early association with the "points metaverse." By pioneering innovative mechanisms like tokenized yield and leveraging strategic ecosystem expansions, Pendle is redefining how users interact with future returns. This article explores Pendle’s transformation, its upcoming catalysts, competitive edge, and long-term potential in the DeFi landscape.
What Is the "Points Metaverse"?
The term "points metaverse" refers to a trend in DeFi where protocols distribute non-transferable points instead of tokens. These points act as credentials for future airdrops—users who actively engage with a protocol accumulate more points, increasing their chances of receiving valuable token distributions later.
Pendle became a central hub during this era because its Yield Token (YT) mechanism enabled users to effectively "buy points with leverage." By depositing yield-bearing assets and isolating their future yield into tradable YTs, users could amplify exposure to high-reward farming opportunities across emerging protocols.
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This created a self-reinforcing cycle: more yield farming → higher demand for YTs → increased capital inflows into Pendle. At its peak, Pendle’s Total Value Locked (TVL) reached $6.7 billion, making it one of the most capitalized protocols in DeFi.
The Decline of the Points Metaverse
All trends eventually cool down. As the hype around speculative point farming faded and broader crypto markets entered a bear phase, Pendle’s TVL dropped sharply—from $6.7 billion to just $1.9 billion, a decline of over 71%.
Many assumed Pendle would fade into obscurity. But rather than relying solely on fleeting narratives, the team focused on sustainable innovation and diversification.
Pendle expanded into Bitcoin sidechains, tapping into new liquidity sources beyond Ethereum. While the points activity on these chains was less intense, it helped stabilize and eventually grow Pendle’s TVL back above $4 billion.
This pivot signaled a crucial shift: Pendle was no longer just a vehicle for points farming—it was becoming a foundational yield infrastructure.
Pendle V3: Introducing Boros
Enter Pendle V3, also known as Boros—a major upgrade that redefines what’s possible in yield trading.
Boros introduces leveraged yield trading, including support for off-chain interest rates via oracles. This allows users to gain amplified exposure to yield streams, similar to how perpetual futures work in traditional crypto trading.
Why Is Boros a Game-Changer?
Leverage inherently increases both risk and reward—but also drives greater economic activity. Here's why Boros matters:
- Higher fee generation: Leveraged positions generate more trading fees.
- Increased volume: Traders seek amplified returns, boosting transaction activity.
- Interest income: Borrowing funds to open leveraged positions creates lending revenue.
- Exposure scaling: Users can gain 2x, 5x, or even higher exposure to yield without additional principal.
- Funding rate hedging: A novel use case in DeFi, allowing protocols like Ethena to hedge funding rate risks using Pendle markets.
These features open up entirely new revenue streams for Pendle while attracting sophisticated traders and institutional-grade strategies.
Product-Market Fit in Action
Consider this: the top five centralized exchanges see over $245 billion in daily perpetual trading volume**, with **$95 billion in open interest. Meanwhile, USDe (a synthetic dollar) already has a TVL of $3.8 billion.
Boros positions Pendle to capture a slice of this massive market by bringing leveraged yield instruments on-chain—offering DeFi-native alternatives to perpetual contracts.
FAQs: Understanding Pendle’s Evolution
Q: What are PT and YT tokens?
A: Pendle splits yield-bearing assets into two tokens:
- Principal Token (PT): Represents the right to redeem the underlying asset at maturity.
- Yield Token (YT): Represents the right to collect future yield. YTs can be traded or used in leveraged strategies.
Q: Does Pendle issue new tokens with Boros?
A: No. Boros does not introduce a new token. Instead, 80% of its generated revenue is distributed to vePENDLE holders—aligning incentives and rewarding long-term stakeholders.
Q: How does Pendle generate revenue now?
A: Through trading fees on YT/PT pools, swap fees in leveraged markets, and income from integrated protocols using Pendle as yield infrastructure.
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Competitive Landscape and Ecosystem Strength
While several projects aim to tokenize yield—such as Yearn, Element Finance, or Notional—none have matched Pendle’s depth of integration and liquidity.
Pendle boasts a vibrant ecosystem with direct integrations across major DeFi platforms, including Curve, Aave, Lido, and Ethena. Its ability to support diverse yield sources—from liquid staking derivatives to stablecoin yields—gives it unmatched versatility.
Moreover, Boros strengthens Pendle’s moat by introducing complex financial primitives that are difficult to replicate. With early partnerships confirmed (e.g., Ethena), Pendle is setting the standard for institutional-grade yield products in DeFi.
Upcoming Catalysts
1. Expansion to New Chains
Pendle continues its multi-chain expansion strategy:
- Sonic Chain (formerly Fantom): A high-performance EVM-compatible chain targeting institutional adoption.
- Base Chain: Backed by Coinbase, Base recently hit a record $3.4 billion in DeFi TVL—making it one of the most promising L2 ecosystems.
Update: Pendle has officially launched on Base Chain, unlocking access to millions of new users and significant liquidity inflows.
This expansion enables seamless yield aggregation across layers, further cementing Pendle’s role as a cross-chain yield hub.
2. BTCFi Momentum
Bitcoin’s price is nearing all-time highs, yet BTCFi (Bitcoin Finance) remains underdeveloped compared to Ethereum-based DeFi. However, Pendle has become a key player here—three BTCFi pools on Pendle now exceed $100 million in liquidity each.
With major protocols like Solv Protocol preparing for their Token Generation Event (TGE), there’s strong potential for renewed interest and capital inflows into BTC-related yield products.
The Team Behind Pendle
Credit must be given to the Pendle team for their disciplined approach. Instead of launching a new token for Boros—which could have generated short-term profits—they chose to funnel 80% of Boros revenue to vePENDLE stakers.
This decision reflects a commitment to decentralization and long-term value accrual. It reinforces trust among users and positions vePENDLE as one of the most economically powerful governance tokens in DeFi.
Risks and Challenges
1. Reliance on BTCFi Growth
While BTCFi shows promise, its ecosystem is still nascent. If adoption stalls or key projects delay launches, liquidity could shift elsewhere.
However, Pendle’s flexible architecture allows it to adapt quickly to new narratives—from restaking yields to AI-driven protocols—reducing dependency on any single sector.
2. User Adoption of Boros
Leveraged yield trading is complex. Will retail and institutional users embrace Boros at scale? Early partnerships suggest yes, but widespread adoption will depend on education, interface improvements, and market conditions.
Final Thoughts: A New Era for Yield
Pendle has successfully moved beyond the points metaverse. With Boros, cross-chain expansion (especially on Base), and deep integrations in BTCFi, it is poised for sustained growth.
DeFi is entering a renaissance of financial engineering—and Pendle is at the forefront. Whether you're a yield optimizer, protocol builder, or long-term investor, Pendle offers powerful tools to harness future returns in ways previously unimaginable.
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Core Keywords:
- Pendle
- Yield trading
- Points metaverse
- Boros
- Leveraged yield
- BTCFi
- DeFi
- PT and YT tokens