Key Takeaways:
Pendle Finance is retiring its complex vePENDLE model in favor of sPENDLE, a simplified liquid staking solution.
Stakers will now receive 80% of protocol revenue via direct PENDLE buybacks, replacing the old manual voting rewards.
Long-term lockups are eliminated; users can unstake in 14 days or redeem instantly for a 5% fee.
Pendle Finance, the leading protocol for yield tokenization and trading, has announced a radical overhaul of its tokenomics with the introduction of sPENDLE. This new liquid staking derivative is set to replace the industry-standard vote-escrowed (ve) model, aiming to simplify user participation and drastically improve capital efficiency. The market responded immediately to the proposal, with the PENDLE token rallying 9% to trade at $2.07 following the announcement.
Dismantling the “Vote-Escrow” Barrier
For years, Pendle relied on the vePENDLE system, which required users to lock their tokens for up to two years to maximize yields and voting power. While effective for alignment, this model created significant illiquidity and complexity for average users.
sPENDLE eliminates these friction points entirely. Under the new system, users no longer need to commit to multi-year lockups. Instead, the protocol offers a flexible unstaking period of just 14 days. For those requiring immediate liquidity, an instant redemption option is available for a 5% exit fee, which is then redistributed to remaining stakers.
This shift transforms PENDLE from a passive governance token into a liquid, productive asset. sPENDLE is designed to be composable, meaning users can hold it to earn rewards while simultaneously deploying it across other DeFi integrations to stack yields – a feature that was impossible with the locked vePENDLE.
Pendle Finance is retiring its vePENDLE model in favor of sPENDLE
80% Revenue Share via Buybacks
The core value proposition of sPENDLE lies in its aggressive revenue-sharing model. In a move to directly align token incentives with protocol success, Pendle Finance has committed to directing 80% of all protocol revenue toward purchasing PENDLE on the open market. These bought-back tokens are then distributed to sPENDLE stakers.
Based on 2025 data, where the protocol generated an annualized revenue of approximately $40 million, this mechanism creates substantial, constant buy pressure. Unlike the previous model, where rewards relied on complex gauge voting and inflationary emissions, sPENDLE rewards are derived from real yield. Furthermore, the proposal includes a 30% reduction in overall PENDLE emissions, effectively tightening supply while increasing demand.
Transition for Loyal Holders
To ensure a fair migration and prevent a supply shock, existing vePENDLE holders are prioritized. A snapshot scheduled for January 29 will determine eligibility for a 4x yield boost. This multiplier will decay linearly over a two-year period, rewarding long-term supporters while gradually transitioning them to the new liquid state without incentivizing an immediate “dump” of unlocked tokens.
Reviving TVL and Market Action
The overhaul comes at a critical juncture for Pendle. After seeing its Total Value Locked (TVL) retrace from a peak of $10 billion down to $340 million in Q1 2026 – largely due to shifting dynamics with partners like Ethena – the protocol needs a catalyst to revive on-chain activity.
Traders are betting that sPENDLE is that catalyst. Following the news, trading volume spiked 34% to $63 million, with Open Interest (OI) climbing 10% to $45 million. Technically, the token is currently testing key resistance at $2.35. A confirmed breakout could open the path to $2.60, while a rejection would likely see price revisit support levels around $1.95. The RSI remains neutral at 45-50, suggesting there is ample room for further upside if the migration executes smoothly.
By pivoting from the complex “ve(3,3)” mechanics to a streamlined liquid staking model, Pendle Finance is positioning itself to lead the yield trading sector’s recovery in 2026, offering a “real yield” narrative that appeals to both institutional and retail capital.
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