Pendle Major Transformation: sPENDLE takes over vePENDLE, PENDLE holders receive 4x transition rewards

Pendle officially launches its token economy upgrade. According to the latest news, this crypto yield trading platform will introduce a new token sPENDLE to replace the original vePENDLE mechanism. The upgrade involves reforms across multiple dimensions such as income distribution, token emission, and liquidity mechanisms, and offers a transition period benefit for vePENDLE holders. Behind this upgrade reflects Pendle’s deep thinking on its token economy.

sPENDLE vs vePENDLE: From Locking to Flexibility

The core difference between the two token mechanisms lies in flexibility and composability.

This comparison intuitively reflects the direction of the upgrade: shifting from “locked governance” to “flexible participation.”

Three Key Reforms of the Upgrade

Income Distribution Mechanism Optimization

Protocol revenue is no longer simply distributed but adopts a “buyback plus distribution” dual-track system. Pendle will use protocol income to buy back PENDLE tokens, then distribute them to active sPENDLE holders. The benefits of this mechanism are obvious: on one hand, it increases buy support for the token; on the other hand, holders of sPENDLE directly earn yields, strengthening token value capture.

Emission Model from Manual to Algorithmic

The previous manual voting to determine emission directions will be replaced by an algorithmic emission model. The official goal is to improve distribution efficiency while reducing PENDLE emissions by 20-30%. This appears to be a pragmatic reform—reducing emissions generally supports the token price, and algorithmic emission can avoid voting fatigue and human bias.

Breakthrough in Composability

As a fungible token, sPENDLE can be integrated with any DApp. This means holders can not only use it within the Pendle ecosystem but also act as collateral, liquidity providers, and more in other DeFi protocols. Compared to vePENDLE’s limitations, this significantly enhances ecosystem openness.

Transition Arrangements for vePENDLE Holders

On January 29, the vePENDLE lock-up mechanism will be paused. Users holding vePENDLE before this date will receive a special multiplier for their virtual sPENDLE balance based on their remaining lock-up period, up to 4x.

This design has two implications: first, to ensure vePENDLE holders’ rights are not diluted; second, to incentivize users to transition smoothly to the new mechanism through multiplier rewards. In other words, the longer you lock, the higher the multiplier you get—recognition for long-term holders.

Logic Behind the Upgrade

From vePENDLE to sPENDLE, Pendle is modernizing its token economy.

Personal opinion: This upgrade reflects DeFi projects’ pragmatic thinking about user experience. While vePENDLE’s lock-up model ensures long-term commitment, it also limits capital flexibility and ecosystem composability. The emergence of sPENDLE indicates Pendle recognizes this pain point and has chosen a more open, efficient direction. Meanwhile, the reduction in emissions and income buyback mechanisms also imply the project’s emphasis on token scarcity.

Summary

This Pendle upgrade involves three core changes: more flexible exit mechanisms, more efficient emission models, and stronger ecosystem composability. For vePENDLE holders, the maximum 4x transition multiplier provides real protection. For the entire ecosystem, this upgrade may attract more capital, as sPENDLE’s flexibility offers participants more options. The pause on January 29 has been scheduled, and holders need to complete their understanding and preparations beforehand. This is not only an adjustment of the token mechanism but also a re-examination of Pendle’s ecosystem positioning.