Crypto
Pendle’s Quiet Power Move: Why This Yield Giant Still Looks Cheap
<p><strong>Pendle has already proved it can sit at the center of DeFi’s yield universe, yet its token value still lags far behind the influence it now holds.</strong> In other words, the protocol is doing billion-dollar work while the market prices it like a side project.</p>
<h2>Pendle today is much more than a place to park yield</h2>
<p>Many people first met Pendle as a simple venue to split a yield bearing token into principal and yield parts. That starter idea was solid, but the past year shows how quickly the project matured into true infrastructure.</p>
<p>DefiLlama data shows Pendle’s total value locked soared from roughly 230 million dollars at the start of 2024 to more than 4.4 billion dollars by early 2025. More telling than the headline number is where the money came from. Whole ecosystems now build directly on Pendle pools.</p>
<p>A short list of recent examples:</p>
<ul>
<li>Liquid restaking protocols used Pendle pools to bootstrap their tokens, with Ethena’s sUSDe tranche campaign drawing more than 900 million dollars in a single quarter.</li>
<li>Stablecoin newcomers such as LevelUSD and OpenEden plugged into Pendle to create predictable fixed returns that traditional money managers understand.</li>
<li>Asset management firms including Republic Digital and Amber Group publicly disclosed that Pendle principal tokens sit in their on chain treasury strategies.</li>
</ul>
<p>These milestones mark a shift from yield hobbyist tool to foundational layer the same way UniSwap graduated from one trading pair in 2018 to backbone exchange today.</p>
<h2>2024 growth in numbers: the engine behind the narrative</h2>
<p>The speed of adoption sometimes feels abstract, so it helps to put the main metrics side by side.</p>
<table>
<thead>
<tr>
<th>Metric</th>
<th>January 2024</th>
<th>April 2025</th>
<th>Growth</th>
</tr>
</thead>
<tbody>
<tr>
<td>Total value locked (USD)</td>
<td>230 M</td>
<td>4.4 B</td>
<td>1 800 %</td>
</tr>
<tr>
<td>Average daily trading volume</td>
<td>1.1 M</td>
<td>96.4 M</td>
<td>8 660 %</td>
</tr>
<tr>
<td>Share of DeFi yield category</td>
<td>5 %</td>
<td>34 %</td>
<td>+29 pp</td>
</tr>
</tbody>
</table>
<p><strong>Source</strong>: DefiLlama, Pendle Analytics</p>
<p>Behind those numbers sits a consistent playbook. Pendle listings drive liquidity, which convinces other protocols to integrate, which in turn pushes more deposits back into Pendle. A virtuous loop forms.</p>
<p><img class="aligncenter size-large wp-image-57368" src="https://www.theibulletin.com/wp-content/uploads/2025/05/pendle-finance-defi-yield-1024x688.jpeg" alt="pendle finance defi yield" width="740" height="497" /></p>
<p>One overlooked detail is fee flow. Throughout 2024 vePENDLE holders captured annualized rewards above forty percent from trading fees alone, according to Pendle Finance quarterly reports. Add airdrops from projects keen to entice Pendle voters, and the real yield for active participants was closer to sixty percent on capital.</p>
<p>That level of cash return is rare in crypto, let alone in traditional markets where six-month United States Treasury bills yield under five percent (US Treasury data, April 2025).</p>
<h2>Zenith roadmap and the arrival of Citadels</h2>
<p>The team did not sit still after the explosive year. The Zenith roadmap, unveiled in late 2024, breaks Pendle expansion into three pillars.</p>
<ol>
<li>DeFi money markets, already live and scaling.</li>
<li>Citadels, a set of targeted pushes into new territories such as non EVM chains and Islamic compliant finance.</li>
<li>Boros, the venture into perpetual swap funding rates.</li>
</ol>
<p>Citadels deserve special attention because they flip the typical DeFi strategy. Instead of waiting for other chains or capital bases to visit EVM, Pendle plans to meet them on their own turf.</p>
<h3>Non EVM ecosystems</h3>
<p>Solana, TON, and Hyperliquid highlight the initial batch. Solana alone holds more than ten billion dollars in TVL, per Artemis XYZ, and its retail user base frequently skews younger than Ethereum’s. TON brings an on ramp through Telegram’s three hundred million monthly active users. Hyperliquid processes billions in daily perpetual volume without relying on Ethereum. If Pendle can capture even five percent of total yield flow on these networks, the addressable base grows by several multiples.</p>
<h3>Islamic finance angle</h3>
<p>Global Islamic finance assets crossed three point nine trillion dollars in 2023, according to S&;P Global Ratings. Sharia law prohibits interest, yet allows profit sharing or rental style structures. Pendle principal tokens naturally suit that framework because the return stream is known upfront, letting arrangers structure sales as discounted asset transfers rather than interest payments. This niche has been historically untouched in DeFi, so first mover advantage could be substantial.</p>
<h2>Boros redefines the funding rate game</h2>
<p>Perpetual swap funding is the biggest recurring yield fountain in crypto. CryptoQuant estimates combined open interest across top centralized exchanges at more than seventy billion dollars, with daily funding transfers often topping forty million dollars during volatile weeks.</p>
<p>Boros takes aim at this river of payments by packaging funding flows into tradable tokens. That unlocks several use cases:</p>
<ul>
<li>Traders can hedge against negative funding on their own positions instead of completely closing exposure.</li>
<li>Stablecoin protocols like Ethena can secure steadier income streams to back their yields, smoothing out rate swings that scared away risk conscious investors last year.</li>
<li>Market makers and funds can buy discounted funding tokens when sentiment turns one sided, capturing predictable inflows once the market normalizes.</li>
</ul>
<p>An important design note is that Boros uses Pendle’s existing yield token standard. That means vePENDLE governance still directs emissions, ensuring that value created by the new product lines funnels back to the same voter base.</p>
<p>Analyst firm Kaiko Research puts total annualized funding payments at roughly eight billion dollars. Compare that to the entire current yield tokenized on Pendle, which sits near one billion dollars. If Boros captures even ten percent of the funding market, the throughput on Pendle rails could 10X from today’s levels.</p>
<h2>How the valuation stacks up against peers</h2>
<p>With all this momentum it is worth asking why the market cap remains only around 577 million dollars. A quick scan of sector leaders helps frame the gap.</p>
<table>
<thead>
<tr>
<th>Token</th>
<th>Core utility</th>
<th>Fully diluted value (USD)</th>
<th>TVL (USD)</th>
<th>FDV/TVL ratio</th>
</tr>
</thead>
<tbody>
<tr>
<td>Pendle</td>
<td>Yield markets</td>
<td>1.0 B</td>
<td>4.4 B</td>
<td>0.23</td>
</tr>
<tr>
<td>Aave</td>
<td>Lending</td>
<td>2.7 B</td>
<td>12.9 B</td>
<td>0.21</td>
</tr>
<tr>
<td>UniSwap</td>
<td>Spot exchange</td>
<td>5.2 B</td>
<td>6.2 B</td>
<td>0.84</td>
</tr>
<tr>
<td>Hype</td>
<td>Perpetual DEX</td>
<td>20.4 B</td>
<td>2.3 B</td>
<td>8.87</td>
</tr>
</tbody>
</table>
<p><strong>Source</strong>: DefiLlama, CoinGecko, April 2025</p>
<p>Two takeaways jump out.</p>
<ul>
<li>Pendle remains cheaper than direct comparables on a market cap to TVL basis even after its rally.</li>
<li>If Boros lifts revenue while TVL keeps climbing, that ratio could compress further or the price could move higher to compensate.</li>
</ul>
<p>It is impossible to promise that the market will close the valuation gap, yet the numbers show clear room for a catch up trade.</p>
<h2>Key risks and open questions</h2>
<p>No investment story is complete without a look at the other side.</p>
<p><em>Liquidity concentration</em><br />
A significant portion of current TVL is tied to a handful of popular listings, such as stETH and sUSDe. If yields on those products fall rapidly, volume on Pendle could retrace.</p>
<p><em>Security assumptions</em><br />
Pendle smart contracts passed audits from Spearbit and BlockSec, yet smart contract risk always exists. A minor bug in the yield splitting logic could harm confidence even if no funds are lost.</p>
<p><em>Regulatory fog</em><br />
Tokenized yield begins to look like a fixed income product in the eyes of certain regulators. A sudden clampdown on crypto derived interest payouts might limit institutional adoption in the United States or European Union.</p>
<p><em>Competition</em><br />
Projects like APWine and Element emerged earlier in the rate derivative segment though struggled to gain share. A next generation rival with strong backers could tempt liquidity to fragment.</p>
<h2>Frequently asked questions about Pendle Finance</h2>
<p><strong>What is Pendle Finance used for right now</strong>?<br />
Pendle lets users separate the ownership of an asset from its future yield, creating principal tokens and yield tokens that can be traded independently.</p>
<p><strong>How does Pendle make money in DeFi</strong>?<br />
The protocol charges a fee on swaps inside its automated market maker and takes a small cut when users redeem their tokens at maturity. Those fees flow to vePENDLE stakers.</p>
<p><strong>Is Pendle available on Solana or TON</strong>?<br />
Not yet, but the Citadels roadmap states that Pendle aims to deploy native versions on non EVM chains during 2025.</p>
<p><strong>What is Boros in the Pendle ecosystem</strong>?<br />
Boros is an extension that tokenizes perpetual swap funding rates, making it possible to buy or sell future funding flows as standalone assets.</p>
<p><strong>Why do institutions care about Pendle principal tokens</strong>?<br />
Principal tokens behave like zero coupon bonds with a known payout at maturity, giving funds a predictable on chain instrument for cash management without price volatility.</p>
<p><strong>What risks should I watch before buying PENDLE tokens</strong>?<br />
Smart contract bugs, concentrated liquidity in a few yield sources, and potential regulatory shifts around tokenized interest products.</p>
<p><strong>Can Pendle fix Ethena’s unstable funding costs</strong>?<br />
Boros makes it possible for Ethena to hedge funding rate volatility by locking in a fixed stream, which could help smooth USDe yield distribution.</p>
<p><strong>How do vePENDLE holders earn sixty percent a year</strong>?<br />
They collect trading fees, emissions incentives, and occasional airdrops from partner projects that want their voting power. Returns vary and are not guaranteed.</p>
<h2>The bottom line</h2>
<p>Pendle keeps adding real utility, real volume, and new frontiers while its token still trades at a discount to peers. Share this article with anyone curious about sustainable DeFi yield and drop your questions below.</p>

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