Decentralized finance yield platform Pendle plans to replace its vePENDLE token as the protocol’s primary governance and rewards mechanism, saying the existing model has limited wider adoption.
In a post on X on Monday, Pendle announced the launch of sPENDLE, a new liquid staking token that will take over as the protocol’s main governance token. The team said the change is aimed at overcoming key shortcomings of the vePENDLE system while expanding flexibility for tokenholders.
“We’re excited to introduce sPENDLE, the next evolution of Pendle tokenomics,” Pendle said, adding that the upgrade is designed to unlock new opportunities for both PENDLE holders and the protocol.
According to the announcement, sPENDLE will function as a liquid fee and governance token and will feature a 14-day withdrawal period.
Staking for sPENDLE will begin on Tuesday, while new vePENDLE locks will be paused on Jan. 29. Pendle will then take a snapshot of existing vePENDLE balances to facilitate the transition, with the new sPENDLE-based governance framework going live the same day.
According to DeFi Llama, Pendle ranks as the 13th-largest decentralized finance protocol by total value locked, with nearly $3.5 billion currently on the platform.
Improved tokenomics could benefit Pendle users
Pendle said that despite strong growth over the past few years, the vePENDLE model ultimately created “significant barriers” that constrained broader adoption. A major issue was the lengthy lock-up periods, which prevented users from accessing their funds until the lock expired.
While the design was intended to encourage long-term commitment, Pendle acknowledged it fell short of that goal. Under the new system, sPENDLE can be withdrawn at any time after a 14-day unwinding period, or instantly by paying a 5% fee.
The protocol also pointed to vePENDLE’s lack of interoperability. Because the token was non-transferable, it could not be used across other DeFi platforms. Pendle said sPENDLE will instead be integrated with multiple DeFi protocols, enabling additional use cases such as restaking.
Another challenge was the complexity of Pendle’s governance process, which required weekly participation to earn rewards. “The weekly vote-to-earn system required a deep understanding of DeFi and market dynamics to optimize rewards,” Pendle said.
Despite generating more than $37 million in revenue in 2025, Pendle noted that the intricate voting mechanics led to rewards being concentrated among a small group of highly sophisticated vePENDLE holders.
To address this, Pendle is rolling out a simplified governance model. Tokenholders will only need to vote on “critical” Pendle Protocol Proposals to remain eligible for governance rewards, and when no such proposals are active, eligibility will carry over automatically.
As part of the overhaul, Pendle will also use up to 80% of protocol revenue for PENDLE token buybacks, with the proceeds distributed as governance rewards.
