Pendle's 2025 Plan: V2 Upgrade, Multi-Chain Expansion and Perptual Futures Yield Products

Pendle has become a dominant fixed income protocol in the DeFi space, enabling users to trade future yields and lock in predictable on-chain returns.

In 2024, Pendle has driven the development of key narratives such as LST, re-staking, and yield-bearing stablecoins, and has itself become the preferred launch platform for asset issuers.

In 2025, Pendle will expand beyond the EVM ecosystem, evolving into a comprehensive fixed income layer for DeFi, targeting new markets, products, and user groups, covering the native cryptocurrency market as well as institutional capital markets.

The yield derivatives market in the DeFi world can be likened to one of the largest sub-markets in the traditional financial world - interest rate derivatives. This is a market worth over 50 trillion USD, and even a very small share of this market represents billions of dollars in opportunities.

Most DeFi platforms only offer floating yields, which inevitably exposes users to market volatility, but Pendle has introduced fixed-rate products through a transparent and composable system.

This innovation has reshaped the $120 billion DeFi market landscape, making Pendle the dominant yield protocol. In 2024, Pendle's TVL grew over 20 times, currently accounting for more than half of the yield market, which is 5 times that of its second-largest competitor.

Pendle is not just a yield protocol; it has evolved into a core infrastructure of DeFi, driving the liquidity growth of leading protocols.

Finding Common Ground: From LST to Restaking

Pendle has gained early market attention by addressing a core issue in DeFi - the volatility and unpredictability of yields. Unlike Aave or Compound, Pendle allows users to lock in fixed returns by separating the principal from the yield.

With the rise of liquid staking tokens (LST), Pendle's adoption rate has surged to help users unlock the liquidity of their staked assets. In 2024, Pendle successfully captured the restaking narrative - its eETH liquidity pool became the largest pool on the platform just a few days after it went live.

Pendle now plays a key role in the entire on-chain yield ecosystem. Whether providing hedging tools for volatile funding rates or serving as a liquidity engine for yield-bearing assets, Pendle has unique advantages in growing areas such as Liquidity Re-staking Tokens (LRT), Real World Assets (RWA), and on-chain money markets.

Pendle V2: Infrastructure Upgrade

Pendle V2 introduces Standardized Yield Tokens (SY) to unify the packaging of yield-bearing assets. This replaces the fragmented, customized integration schemes of V1, achieving seamless minting of "Principal Tokens" (PT) and "Yield Tokens" (YT).

Pendle V2's AMM is designed specifically for PT-YT trading, offering higher capital efficiency and a better pricing mechanism. V1 uses a generic AMM model, while V2 introduces dynamic parameters (such as rateScalar and rateAnchor) that can adjust liquidity over time, thereby narrowing spreads, optimizing yield discovery, and reducing slippage.

Pendle V2 has also upgraded its pricing infrastructure by integrating a native TWAP oracle in the AMM, replacing the V1 model that relied on external oracles. These on-chain data sources reduce manipulation risk and improve accuracy. Additionally, Pendle V2 has added an order book feature that provides an alternative price discovery mechanism when the AMM price range is exceeded.

For liquidity providers (LPs), Pendle V2 offers a stronger protection mechanism. The liquidity pool is now composed of highly correlated assets, and the AMM design minimizes impermanent loss to the greatest extent possible, especially for LPs who hold to maturity - in V1, LPs' yield outcomes were more difficult to predict due to the mechanism not being sufficiently specialized.

Breaking the EVM Boundaries: Expanding into Solana, Hyperliquid, and TON

The expansion of Pendle to Solana, Hyperliquid, and TON marks a key turning point in its 2025 roadmap. So far, Pendle has always been limited to the EVM ecosystem - even so, Pendle has captured over 50% of the market share in the fixed income sector.

However, the multichain trend of cryptocurrencies has emerged, and through the Citadel strategy, Pendle will break through the EVM island to reach new pools of funds and user groups.

Solana has become a major hub for DeFi and trading activities - January's TVL reached a historic peak of $14 billion, with a strong retail base and a rapidly growing LST market.

Hyperliquid relies on vertically integrated Perptual Futures infrastructure, while TON is supported by the native user funnel of Telegram. Both ecosystems are growing rapidly, but they lack mature yield infrastructure. Pendle is expected to fill this gap.

If deployed successfully, these initiatives will significantly expand the total addressable market for Pendle. Capturing fixed-income capital flows on non-EVM chains could bring in hundreds of millions in incremental TVL. More importantly, this move will solidify Pendle's position not only as an Ethereum-native protocol but also as a key DeFi fixed-income infrastructure across major public chains.

Embracing Traditional Finance: Building a Compliant Yield Access System

Another key initiative in the Pendle 2025 roadmap is the launch of a KYC-compliant version of Citadel designed specifically for institutional funds. This solution aims to connect on-chain yield opportunities with traditional regulated capital markets by providing a structured, compliant access channel for crypto-native fixed income products.

The plan will collaborate with protocols such as Ethena, managed by licensed investment managers under an independent SPV structure. This setup eliminates key friction points such as custody, compliance, and on-chain execution, allowing institutional investors to participate in Pendle yield products through familiar legal frameworks.

The global fixed income market has a size exceeding 100 trillion USD, and even if institutional funds allocate a very small proportion to on-chain assets, it could result in inflows of billions of dollars. According to the EY-Parthenon 2024 survey, 94% of institutional investors recognize the long-term value of digital assets, with over half increasing their allocations.

McKinsey predicts that the tokenized market could reach a scale of $2-4 trillion in the 2030s. Although Pendle is not a tokenization platform, it plays a key role in this ecosystem by providing pricing discovery, hedging, and secondary trading functions for tokenized yield products - whether it is tokenized government bonds or interest-bearing stablecoins, Pendle can serve as the fixed income infrastructure layer for institutional-grade strategies.

Islamic Finance: $4.5 Trillion New Opportunities

Pendle also plans to launch a Sharia-compliant Citadel solution, catering to the global Islamic finance market valued at $45 trillion - this industry spans over 80 countries and has maintained a 10% annual compound growth rate over the past decade, particularly thriving in Southeast Asia, the Middle East, and Africa.

Strict religious restrictions have long hindered Muslim investors from participating in DeFi, but Pendle's PT/YT structure can be flexibly designed to comply with Islamic law, and its form may resemble Islamic bonds (Sukuk).

If successfully implemented, this Citadel will not only expand Pendle's geographical coverage but also validate the capability of DeFi to adapt to a diversified financial system - thereby solidifying Pendle's position as a global fixed income infrastructure on-chain.

Entering the Funding Rate Market

Boros, as one of the most important catalysts in the Pendle 2025 roadmap, aims to introduce fixed-rate trading into the Perptual Futures funding rate market. Although Pendle V2 has established its dominant position in the spot yield tokenization market, Boros plans to expand its business landscape to the largest and most volatile source of yield in the crypto space - the Perptual Futures funding rate.

The current perpetual futures market has an open interest of over $150 billion, with an average daily trading volume of $200 billion. This is a large-scale market but seriously lacks hedging tools.

Boros aims to provide more stable returns for protocols like Ethena by implementing a fixed funding rate - this is crucial for institutions managing large-scale strategies.

For Pendle, this layout contains immense value. Boros is not only expected to open up a new market worth billions of dollars, but it also realizes an upgrade in protocol positioning - transforming from a DeFi yield application to an on-chain interest trading platform, whose functional positioning is comparable to the interest trading desks of CME or JPMorgan in traditional finance.

Boros has also strengthened Pendle's long-term competitive advantage. Unlike chasing market trends, Pendle is laying the groundwork for future yield infrastructure: whether it is funding rate arbitrage or spot holding strategies, it provides practical tools for traders and asset management departments.

Given the current lack of scalable funding rate hedging solutions in both the DeFi and CeFi sectors, Pendle is poised to gain significant first-mover advantage. If successfully implemented, Boros will significantly enhance Pendle's market share, attract new user groups, and solidify its core position as a DeFi fixed income infrastructure.

Core Team and Strategic Layout

Pendle Finance was founded in mid-2020 by anonymous developers TN, GT, YK, and Vu, and has received investments from top institutions such as Bitscale Capital, Crypto.com Capital, Binance Labs, and The Spartan Group.

Financing milestone:

• Private Round (April 2021): Raised $3.7 million, with investors including HashKey Capital, Mechanism Capital, and others;
• IDO (April 2021): Raised $11.83 million at a price of $0.797/token;
• Binance Launchpool (July 2023): Distributed 5.02 million PENDLE (accounting for 1.94% of total supply) through Binance Launchpool;
• Binance Labs strategic investment (August 2023): Accelerating ecosystem development and cross-chain expansion (amount undisclosed);
• Arbitrum Foundation Grant (October 2023): Received $1.61 million for Arbitrum ecosystem development;
• The Spartan Group strategic investment (November 2023): driving long-term growth and institutional adoption (amount undisclosed).

The ecological cooperation matrix is as follows:

• Base (Coinbase L2): Deployed to the Base network, connecting native assets and expanding fixed income infrastructure;
• Anzen (sUSDz): Launch of the RWA stablecoin sUSDz, enabling fixed-income trading linked to real-world returns;
• Ethena (USDe/sUSDe): Integrates high APY stablecoins, connects to crypto-native yields, and enhances DeFi collaboration;
• Ether.fi (eBTC): Launching the first BTC native yield pool, breaking through the boundaries of ETH assets;
• Berachain (iBGT/iBERA): As one of the first infrastructures to settle in, it builds a fixed income framework through native LST.

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