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

Author: Jonathan Ma, Founder of Artemis; Translation: Golden Finance xiaozou

Recently, we interviewed TN Lee, the founder of Pendle. Pendle has become one of the fastest-growing fixed income and yield trading protocols in the DeFi space, with a total locked value (TVL) surpassing billions of 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 caters to both risk-averse investors seeking predictable returns and risk-tolerant traders chasing points and excess returns.

This article will深入解析Pendle's development history, future opportunities, and the strategic layout for seizing the $14 trillion global fixed income market.

1**, helloTN!Pendle was established in2020. Could you share your entrepreneurial story with us? What was your original intention for foundingPendle?**

Pendle's concept was born during 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: Can we 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 actually the largest securities market in the world, this concept became even more significant.

2**, As I remember, Pendle was initially the main way to participate in yield farming with Eigenlayer and Ethena last year. Please explain the essence of Pendle in simple terms and how users can utilize Pendle?

Pendle is essentially a yield trading protocol. In simple terms, we enable users to trade the “yield rights” of assets, where the yield encompasses all receivable rights generated by the assets, including regular income and reward points. The implementation involves separating the yields and 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 generated by a certain asset, you can buy YT. If the judgment is correct, the value of the returns accumulated by YT exceeds the purchase cost, thereby realizing a profit.

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

In addition to earning yields, 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 receive?**

Pendle's profits mainly come from two sources: exchange fees and revenue sharing. In short, the higher the trading volume and total value locked (TVL), the more revenue the protocol generates. Some of the revenue sharing is also 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 there is a perception that “it is very difficult to list tokens on Pendle.” In fact, listing tokens on Pendle is very easy, especially now that we have established a community-driven liquidity pool deployment process. This is also the main reason for the recent emergence of a large number of new markets on Pendle, 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 view Pendle as a core winner in the stablecoin space. Why do stablecoins account for 78% of the total locked value of Pendle? What are your thoughts on the future opportunities for Pendle in the stablecoin sector? **

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 narrative, our TVL was mainly composed of staking-related assets and was mostly denominated in ETH. Then we saw the rise of the BTCFi narrative, led by Babylon and its derivatives, and our TVL naturally followed the trend, with a significant increase in the proportion of BTC assets.

Stablecoins have become the focus of the market, and our TVL shows the same pattern. Pendle's core advantage lies in its design architecture and infrastructure, which can quickly adapt to various market narratives and trends. As long as an asset can generate yield, it can be reconstructed through “Pendle-ization”.

6**, what key indicators are most critical for Pendle? When communicating with investors and circulating token funds, how significant is the weight of fundamental analysis?**

TVL and trading volume are core indicators that directly contribute to protocol revenue, and they are also key considerations when we communicate with investors and circulating token funds. Market narratives may change with cycles, but these fundamental indicators remain the core metrics for assessing our performance over the long term.

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

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

We have three core goals this year:

First is Boros, our brand new leveraged yield trading platform. The core design goal of Boros is to handle various yield sources, 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 growth reaching 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 sector.

Secondly, the Citadels project aims to optimize the circulation ecosystem of PT and build an independent economic system—especially important after PT recently broke through 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 that require KYC, Sharia-compliant funds, and even non-EVM chains like HYPE, TON, and Solana. Each direction is a “fortress” we aim to build, marking an important step for Pendle to achieve comprehensive fixed income proliferation.

Finally, as we enter a new growth phase, Pendle V2 will evolve towards permissionless. As mentioned earlier, the process of listing assets on Pendle has now become unprecedentedly simple.

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

We have an ambitious vision for Pendle - we hope to enable all types of yields to be traded on Pendle, not just limited to the DeFi space, but also covering all kinds of yield-bearing assets globally. Our goal is to create a yield trading market that becomes the go-to 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-world problems more effectively than traditional financial solutions. This is the standard set for Pendle.

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

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

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

This means that appropriate channels need to be established to package and promote these products in a way that traditional finance can understand. This brings forth 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 external 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 for integrating our infrastructure into a broader financial world. Although this is a multidimensional and complex challenge, 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 doDeFifinancial products likePendleneed to exist?**

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 wealth in a predictable manner. Such products naturally attract a user base that is different from the typical DeFi speculator: mature investors often have a more nuanced consideration of risk, rather than blindly chasing high annual returns.

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

As a yield trading market, Pendle enables real price discovery for the yield curve in the crypto space. It helps establish the interest rate term structure, analogous to the role of Chinese 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 mere yield platform. It has become a democratized “early investment” platform, allowing retail investors to position themselves in emerging protocols in ways that were previously limited to insiders or venture capitalists. This functional layer is highly attractive and aligns closely with our goal of building a more open and inclusive yield market.

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 a clear phase shift: early liquidity was highly concentrated in ETH (especially during the LST and LRT phases), and as BTCfi emerged, our liquidity allocation naturally shifted as well.

Stablecoins now account for over 78% of the 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 from wealth preservation users.

This agility that adjusts with market dynamics is our core advantage. It is this capability that allows us to remain relevant and achieve growth across different narrative cycles.

12**,**** what does a typical user profile of Pendle look like?**

Although it sounds like a cliché, Pendle can indeed provide value for various 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 wish to leverage the protocols 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 returns while also sharing the upside potential of profits and points.

Pendle** Data Deep Analysis**

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

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

Stablecoins are a core pillar of Pendle's growth. With the total supply of stablecoins surpassing $300 billion and the proportion of interest-earning stablecoins rapidly increasing, Pendle has become a key platform for the tokenization and trading of such yield-generating 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 cryptocurrency space. This makes stablecoins a central element of 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 on the reliability of stablecoins.