Pendle Revamps Governance Token to Address Low User Adoption

Pendle Unveils a New Governance Era as sPENDLE Replaces vePENDLE

Decentralized finance protocol Pendle is entering a new phase of its evolution after announcing a major overhaul of its governance model, replacing the long-standing vePENDLE token with a new, more flexible asset called sPENDLE. The change comes as the team acknowledges that, despite Pendle’s impressive growth, its previous governance design failed to achieve broad user participation.

The transition marks one of the most significant tokenomic updates in Pendle’s history and reflects a wider trend across DeFi: simplifying governance, improving liquidity, and lowering barriers for everyday users.

Why Pendle Is Moving Away From vePENDLE

Pendle’s original governance system was built around vePENDLE, a vote-escrow token that required users to lock their PENDLE for long periods of time. While the model was intended to encourage long-term alignment with the protocol, it ultimately created friction for most participants.

According to the Pendle team, long lock-up durations, non-transferability, and limited interoperability made vePENDLE unattractive to a large segment of users. Governance participation also required weekly engagement and a deep understanding of DeFi mechanics, which concentrated rewards among a small group of advanced participants.

This complexity became increasingly misaligned with Pendle’s expanding user base and growing total value locked, prompting the team to rethink how governance and incentives should function.

Introducing sPENDLE: A More Liquid Governance Token

The newly announced sPENDLE token is designed to address these shortcomings by introducing liquidity and flexibility into Pendle’s governance framework. Unlike vePENDLE, sPENDLE is a liquid staking and governance token that allows holders to exit their position with a 14-day withdrawal period, or immediately by paying a small fee.

This shift removes the psychological and financial burden of long-term lock-ups, making governance participation more accessible to both retail users and institutions. The Pendle team believes that lowering exit friction will significantly improve adoption and engagement across the ecosystem.

Staking for sPENDLE is set to go live shortly, while new vePENDLE locks will be paused ahead of a snapshot that will facilitate the transition.

Interoperability and DeFi Integration Take Center Stage

One of the most critical limitations of vePENDLE was its lack of interoperability. Because the token was non-transferable, it could not be used across other DeFi platforms, limiting its utility beyond Pendle’s own ecosystem.

sPENDLE changes that dynamic entirely. The new token is designed to integrate with multiple DeFi protocols, opening the door to use cases such as restaking, composable yield strategies, and broader liquidity participation. This aligns Pendle with a growing movement toward modular DeFi, where assets are expected to function seamlessly across platforms.

For traders and investors who already operate across multiple ecosystems, this change significantly increases the attractiveness of holding PENDLE.

A Simpler Governance Model Focused on Real Decisions

Pendle is also redesigning how governance itself works. Under the new structure, token holders will no longer be required to participate in weekly votes to remain eligible for rewards. Instead, governance participation will focus only on major protocol decisions, known as Pendle Protocol Proposals.

When no critical proposal is active, holders will automatically remain eligible for governance rewards without taking any action. This approach aims to strike a balance between meaningful decentralization and user convenience, ensuring that governance rewards are no longer limited to a small, highly technical minority.

Revenue Buybacks and Long-Term Incentives

To further strengthen the new model, Pendle plans to allocate up to 80% of its protocol revenue toward PENDLE token buybacks, which will then be distributed as governance rewards. This mechanism directly links protocol performance to token holder incentives, reinforcing long-term alignment without forcing users into rigid lock-ups.

With Pendle reportedly generating tens of millions of dollars in revenue, this buyback-driven reward system could become a powerful driver of sustainable value for holders under the new sPENDLE framework.

Pendle’s Position in the DeFi Market

Despite its governance challenges, Pendle has grown into one of the largest DeFi platforms by total value locked, ranking among the top protocols in the sector with billions of dollars secured on-chain. The governance revamp suggests that Pendle is now prioritizing scalability of participation, not just scalability of capital.

If successful, the sPENDLE transition could serve as a blueprint for other DeFi protocols struggling with low governance engagement.

Tracking PENDLE and DeFi Tokens on BYDFi

As governance innovation continues across DeFi, many traders prefer using flexible and advanced trading platforms to gain exposure to tokens like PENDLE. Platforms such as BYDFi provide access to a wide range of crypto assets, market analysis tools, and derivatives trading options, making them a practical choice for users looking to trade or hedge DeFi-related tokens.

For investors monitoring Pendle’s transition and broader DeFi governance trends, BYDFi offers a streamlined environment to track price movements, manage risk, and explore emerging opportunities without the complexity often associated with decentralized interfaces.

A Strategic Reset With Broader Implications

Pendle’s move from vePENDLE to sPENDLE is more than a technical upgrade—it is a strategic reset that acknowledges the realities of user behavior in modern DeFi. By prioritizing liquidity, interoperability, and simplified governance, Pendle is positioning itself for its next stage of growth.

Whether sPENDLE delivers the adoption boost Pendle expects will become clearer in the months ahead. However, one thing is certain: governance models that prioritize usability and flexibility are quickly becoming the standard in decentralized finance.

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