Pendle, a decentralized finance (DeFi) protocol, will phase out its existing governance asset vePENDLE in favor of a new liquid token, sPENDLE, starting this month. This move aims to create a more efficient model that encourages broader adoption.
The platform acknowledged that the previous vePENDLE token’s long lock-in periods and complexity significantly hindered user participation, despite the increasing traction of the protocol.
In a recent announcement on X (formerly Twitter), Pendle introduced sPENDLE, designed to replace vePENDLE as the chief governance asset. “We’re thrilled to unveil sPENDLE, which represents a significant advancement in Pendle’s tokenomics tailored to address the essential limitations in the vePENDLE framework and to generate fresh opportunities for holders and the platform,” stated Pendle.
The sPENDLE token will feature a 14-day withdrawal timeframe, offering users more flexibility.
Pendle announcement
Source: Pendle
Staking for sPENDLE is set to commence on Tuesday, with vePENDLE locking paused on January 29 for a balance snapshot to facilitate the transition.
The new governance structure will also be activated on that day, a crucial step in the transition to integrating sPENDLE.
According to data provided by DeFi Llama, Pendle is currently the 13th largest DeFi platform, with a total locked value nearing $3.5 billion.
Enhanced Tokenomics as a Boost for Pendle Users
In its announcement, Pendle observed that the complex governance model of vePENDLE hindered wider adoption, with extended locking periods preventing users from retrieving their funds promptly. Designed to foster long-term loyalty, this approach fell short of its objectives.
Conversely, sPENDLE can be locked for flexible durations and withdrawn after a 14-day unwinding period or immediately at a 5% penalty.
To mitigate previous interoperability issues, sPENDLE will be compatible with multiple DeFi platforms for various uses, including restaking.
Additionally, Pendle plans to simplify governance participation, shifting away from weekly voting requirements to a more intuitive process where holders only need to respond to pivotal Governance Proposals (PPP) to qualify for rewards.
In summary, Pendle aims to reshape its governance framework, enhancing the user experience while enabling broader participation in its dynamic ecosystem.
