As Pendle Hits $1bn In TVL, What's Behind This New Surge?

Written by

Eddie Mitchell

Cryptocurrency Writer

Decentralized finance (DeFi) platform Pendle has surpassed $1billion in total value locked (TVL), adding over $750million since the beginning of the year.

The news comes following the January rollout of their liquid staking token finance (LRT) pools today, 9 February 2024.

Pendle TVL explodes

After launching in 2021, Pendle’s TVL slowly dwindled from early peaks of around $38m in November of that year, to lows just under the $4m mark through June and July of 2022. 

However, things began to take a turn in 2023 when TVL pressed past $10m and maintained momentum throughout the year. By 1 January, Pendle held $233.6m in TVL and has since gained approximately $786m in the following weeks.

Source: DeFi Llama

The project’s native token, PENDLE, also relished in these gains. At its lowest throughout 2022, PENDLE was trading at or just above $0.04.

This began to change throughout the following year and the coin has since rallied astronomically, peaking at $3.14 on 7 February. PENDLE is currently trading for $2.87, up more than 3,050% in the past year.

Pendle yearly chart
Whilst the uptick in the value of PENDLE owes some thanks to the overall performance of the crypto market, much of its success comes from its platform and the recent introduction of LRTFi pools to the platform.

What is Pendle?

Pendle has a rather unique approach to DeFi investments. It enables users to tokenize and exchange future yields using an advanced automated market maker system (AMM) and other powerful mechanisms. 

It was designed with the intent of introducing sophisticated and efficient yield trading tools for cryptocurrency holders with yield-producing assets. It acts as a price discovery tool, offering users Principal Tokens (PTs) and Yield Tokens (YTs) in return for user’s DeFi investments. 

PTs are the principal amount of the deposited assets, and YTs represent the future yield generated by the deposited assets. With this, traders can speculate and secure future return rates.

Liquid Restaking Token Finance (LRTFi)

Crypto yield trading can be a relatively lucrative endeavor for investors, and the recent introduction of LRTFi has proven to be extremely appealing to crypto traders.

It’s a relatively new field within DeFi that, as the name suggests, enables the liquidity of staked assets through the issuance of LRTs, meaning that users can continue to earn rewards even though their assets are locked up.