Exclusive Interview with the Founder of Pendle: The Road to the Empire of Yield Trading

Author: Jonathan Ma, founder of Artemis; Translator: Jinse Finance xiaozou

Recently, we interviewed Pendle's founder TN Lee. Pendle has become one of the fastest-growing fixed income and yield trading protocols in the DeFi space, with a total locked value (TVL) exceeding several billion dollars, and stablecoins accounting for over 80% of the liquidity. By splitting assets into principal tokens (PT) and yield tokens (YT), Pendle has created a bilateral market that satisfies both risk-averse investors seeking certainty in returns and risk-tolerant traders chasing points and excess returns.

This article will delve into the development history of Pendle, future opportunities, and the strategic layout for capturing the $140 trillion global fixed income market.

1**, helloTN!Pendle was founded in2020. Could you share with us the story of your entrepreneurial journey? What was your original intention for founding Pendle?**

The concept of Pendle was born in the summer of DeFi in 2020. At that time, liquidity mining was at its peak, and annualized returns in the hundreds or even thousands of percent were common, but these returns often lasted only a few days or even hours. This led us to ponder: is it possible to lock in these high yields? Thus, we decided to create a protocol that makes fixed income in DeFi a reality. When we realized that the global fixed income market is indeed the largest securities market in the world, this concept became even more significant.

2**, as I remember, Pendle was initially the main avenue for yield farming through Eigenlayer and Ethena last year. Please explain the essence of Pendle in simple terms and how users should utilize Pendle?

Pendle is essentially a yield trading protocol. In simple terms, it allows users to trade the “yield rights” of assets, where the yield encompasses all receivable rights generated by the assets, including regular yields and reward points. The implementation method is to separate the yields and reward points generated by the assets into independent assets—Yield Tokens (YT), while the remaining principal corresponds to Principal Tokens (PT).

If you are optimistic about the future returns and points of a certain asset, you can buy YT. If your judgment is correct, the value of the profits accumulated by YT will exceed the purchase cost, thus realizing a profit.

For users seeking stable returns, purchasing PT at a discount can yield a fixed annual return, equivalent to buying assets at a discounted price and profiting from the price difference.

In addition to earning income, Pendle also provides opportunities to participate in various popular DeFi protocols, allowing users to choose the investment portfolio that best suits their risk preferences.

3**, what is the business model of Pendle? What value can PENDLE token holders obtain?**

Pendle's profits mainly come from two sources: exchange fees and yield cuts. In simple terms, the higher the trading volume and total value locked (TVL), the more income the protocol generates. Some of the yield cuts will also be distributed to vePENDLE holders in the form of points or airdrops.

4**, what is the biggest misunderstanding about Pendle in the current market?**

I believe the perception that “it is very difficult to list on Pendle” is incorrect. In fact, listing on Pendle is very simple, especially now that we have established a community-driven liquidity pool deployment process. This is also the main reason why a large number of new markets have emerged on Pendle recently, particularly for yield-bearing stablecoin projects like Gaib, USDai, and others.

If you are a DeFi project that can generate any form of income/points, listing assets on Pendle is actually very straightforward.

5**, James Ho from Modular Capital and Jose Sanchez from Spartan Group both regard Pendle as a core winner in the stablecoin sector. Why do stablecoins account for 78% of the total locked value of Pendle? How do you view the future opportunities for Pendle in the stablecoin space?**

I believe this success is attributed to the fact that stablecoins are the main narrative driver in the current market. Looking back, when Eigenlayer and restaking became the dominant narratives, our TVL was mainly composed of staking-related assets, primarily valued in ETH. Subsequently, we saw the rise of the BTCFi narrative, led by Babylon and its derivatives, and our TVL naturally followed the trend, with the proportion of BTC assets significantly increasing.

Stablecoins have become the focus of the market, and our TVL reflects the same trend. Pendle's core advantage lies in its architectural design and infrastructure that can quickly adapt to various market narratives and trends. As long as assets can generate yield, they can be restructured through “Pendle-ization.”

6**, what are the key indicators for Pendle? When communicating with investors and circulating token funds, how much weight does fundamental analysis hold?**

TVL and trading volume are core indicators that directly contribute to protocol revenue and are key considerations in our discussions with investors and circulating token funds. Market narratives may change with cycles, but these fundamental indicators remain the core metrics for long-term assessment of our performance.

For large investors and circulating token funds, trust is crucial, and these metrics are a quantitative reflection of the trustworthiness of the protocol. The longer we maintain the growth of these metrics, the higher the trust value accumulated by the protocol.

7**, could you please discuss the future development roadmap of Pendle?**

We have three core objectives this year:

First is Boros, our brand new leveraged yield trading platform. The core design goal of Boros is to handle various sources of yield, covering not only DeFi yields but also off-chain traditional financial yields such as mortgage rates. Initially, we will focus on more direct and market-familiar areas: perpetual funding rate trading. In just two months since launch, Boros has shown strong growth momentum, with trading volume increasing at a rate 10 times that of the V2 version, and nominal trading volume surpassing $1.8 billion. Even at this growth rate, we currently only cover about 0.03% of the total addressable market, and there is still significant growth potential in the perpetual funding rate space.

Secondly, the Citadels program aims to optimize the circulation ecosystem of PT and build an independent economic system — especially important after PT recently broke the historical peak of $2 billion in the lending market. Currently, fixed-income PT mainly exists in the EVM ecosystem, and through Citadels, we will expand to institutional investors requiring KYC, Sharia-compliant funds, and even non-EVM chains such as HYPE, TON, and Solana. Each direction is a “fortress” we aim to build, which is an important step for Pendle to achieve the widespread adoption of fixed income.

Finally, as we enter a new growth phase, Pendle V2 will evolve towards permissionlessness. As mentioned earlier, the process for assets to go live on Pendle has become unprecedentedly simple.

8**, what major development opportunities might Pendle face after the year 2030 in the long term?**

We have an ambitious vision for Pendle - we hope to enable all types of yields to be traded on Pendle, not limited to the DeFi space, but also covering various yield assets globally. Our goal is to create a yield trading market that becomes the preferred platform for obtaining top yields, whether these yields come from DeFi, CeFi, or traditional finance.

We firmly believe that the most influential blockchain applications are those projects that can solve real problems more effectively than traditional financial solutions. This is precisely the standard set for Pendle.

From a data perspective, the market opportunity is enormous: the global fixed income market size is approximately $140 trillion, making it the largest securities market in the world. The demand for fixed income products is not a hypothesis, but a market that has long been mature. However, there is currently a lack of a unified platform that can seamlessly integrate various on-chain and off-chain yields, which is exactly the market gap that Pendle aims to fill.

9**,**What are the biggest risks and challenges facing Pendle's successful path in the future?

The core challenge we face currently is to break through the limitations of the “on-chain model”. Pendle has established a solid product-market fit within the crypto-native ecosystem, but to truly achieve scale and become a global yield layer, it is essential to build the infrastructure that can push Pendle products beyond the boundaries of Web3.

This means that suitable channels need to be established to package and promote these products in a way that traditional finance can understand. This brings a series of new topics - regulatory compliance, KYC certification, legal framework, asset custody, etc. These are important cornerstones for achieving real-world adoption and attracting outside institutions/funds/clients.

We are actively negotiating with several potential partners to jointly overcome these obstacles. At the same time, we are closely collaborating with the Ethena team to explore specific pathways to integrate our infrastructure into a broader financial world. Although this is a complex challenge with multiple dimensions, it is also the most exciting frontier battlefield for us. Once we break through, we will unlock a development space far greater than DeFi.

10**, why do**** DeFi need financial products like Pendle****?**

Before Pendle emerged, the DeFi space actually lacked reliable ways for users to gain exposure to fixed income, which was a significant market gap. Fixed income is a core component of any mature financial system – it allows investors to preserve and grow their value in a predictable manner. Such products naturally attract a user base that is different from typical DeFi speculators: mature investors tend to have more nuanced considerations of risk, rather than blindly chasing high annual yields.

We have witnessed this trend firsthand: despite the potential upside of future earnings and airdrops, a large portion of PT trading volume comes from eight to nine-figure whale users who lock in fixed income. From the perspective of risk and return, the reliability and predictability of fixed income have irreplaceable advantages.

As a yield trading market, Pendle enables true price discovery for yield curves in the crypto space. It helps establish the term structure of interest rates, similar to the role of Chinese government bonds in traditional finance, which has significant implications for the broader DeFi financial market.

In addition, with the rise of points and airdrop mining, Pendle has evolved into a form that goes beyond a simple yield platform. It has become a democratized “early investment” platform, allowing retail investors to access emerging protocols in a way that was previously only available to insiders or venture capitalists. This functional layer is highly attractive and aligns closely with our goal of making the yield market more open and inclusive.

11**,**** What makes Pendle unique compared to early attempts to build similar protocols?**

I believe the key difference lies in our ability to recognize and adapt to emerging narratives and market trends. Looking at the evolution of Pendle's TVL composition, you will notice significant phase shifts: early liquidity was highly concentrated in ETH (especially during the LST and LRT phases), and as BTCfi rose, our liquidity allocation naturally shifted as well.

Currently, the proportion of stablecoins has exceeded 78% of TVL, which is actually a healthy signal—unlike speculative assets, the demand for stablecoin yields has cross-cycle resilience. Regardless of bull or bear markets, there is always a demand in the market for stable and predictable returns, especially among wealth preservation users.

This agility that adjusts dynamically to market changes is our core advantage. It is this capability that allows us to maintain relevance and achieve growth across different narrative cycles.

12**,**** what is the typical user profile of Pendle?**

While it may sound like a cliché, Pendle can indeed provide value to various types of users:

If you prefer conservative and stable returns, the fixed income provided by the principal token PT perfectly meets the needs of wealth preservation and planning.

If you have a high risk tolerance and want to leverage the agreements you are optimistic about (especially to maximize airdrop potential or future returns), the yield token YT is the ideal tool.

If you are between the two or want to balance both, as a liquidity provider (LP), you can earn fixed income while also sharing the upside potential of earnings and points.

Pendle Data Deep Dive

As of September 2025, Pendle's total locked value (TVL) has surpassed a peak of $13 billion, with USDe accounting for the highest proportion (approximately $8 billion), while the remainder is composed of other stablecoins, BTC, and ETH.

Pendle's liquidity structure is highly narrative-driven. Initially dominated by ETH (LST/LRT phase), it later shifted towards BTCFi, and now **stablecoins account for over 78%. This reflects the market's strong demand for predictable and sustainable returns. The peak volatility and pullback in September 2025 reflect the liquidation wave from large expiry cycles.

Stablecoins are the core pillar of Pendle's growth. As the total supply of stablecoins surpasses $300 billion and the proportion of interest-bearing stablecoins rapidly increases, Pendle has become a key platform for the tokenization and trading of such yield-bearing assets. By capturing the trend of users shifting from passive holding of stablecoins to actively seeking yields, Pendle is tapping into the largest and most stable liquidity base in the crypto space. This positions stablecoins as a cornerstone for its long-term TVL and revenue expansion.

Pendle's collateral asset base has significantly expanded, with stablecoins leading with 28 collateral types (+27%), highlighting their position as a pillar of protocol growth. Ethereum (11 types, +10%) and other assets (23 types, +21%) continue to provide diversified support. This diversification pattern indicates that Pendle is evolving into a multi-asset yield trading market, capable of flexibly capturing new narratives while always anchoring itself with the reliability of stablecoins.