Pendle Reveals Token Upgrade: sPendle to Replace vePendle
Pendle, a prominent decentralized finance (DeFi) protocol, has taken a crucial step in reshaping its token economy. The team has announced a major upgrade to its token vePENDLE, replacing it with the new sPENDLE. This move focuses on making investor participation more flexible, with the token becoming more accessible to the community.
With the introduction of sPENDLE, the DeFi platform is shifting toward a more liquid and revenue-driven model. The new token connects protocol earnings directly to active holders and adopts an algorithmic emissions model. Via this model, Pendle aims to create a more sustainable and flexible system.
Pendle Revamps Tokenomics with sPENDLE
According to Pendle’s official post, the platform has introduced sPENDLE, replacing vePENDLE. “We’re excited to introduce sPENDLE, the next evolution of Pendle tokenomics,” stated the team.
This shift significantly marks a fundamental reset to the project’s tokenomics. The move particularly intends to fix long-standing inefficiencies tied to rigid multi-year lockups. With sPENDLE, the platform offers users a more flexible structure. Users are offered a 14-day penalty-free withdrawal window or instant redemption at a 5% fee. The protocol statement read,
“sPENDLE replaces the multi-year lock model with a simple 14-day withdrawal period (or instant redemption for a 5% fee). This makes sPENDLE a liquid, composable, and fungible token that can be integrated with other dApps while continuing to earn rewards, eliminating the trade-off between participation and liquidity regardless of time horizon.”
As noted by the team, “sPENDLE is a liquid staking token that represents 1 PENDLE deposited in the staking module, which was designed in mind to eliminate the frictions mentioned.”
Interestingly, this model removes the barriers of the vePENDLE model. Previously, the protocol faced issues like low engagement and trapped capital. But with the token upgrade, the barriers will be minimized, sparking growing community participation.
Unveiling Revenue-Backed Reward System
Significantly, the core part of the token upgrade is a revenue-backed reward system. According to the statement, Pendle will use protocol earnings to repurchase PENDLE tokens and distribute them to eligible sPENDLE holders. This links the token value to the platform performance. It also attracts more community members to the sPENDLE token. The platform added,
“sPENDLE holders are only considered “inactive” if they fail to cast a vote during a period when a Pendle Protocol Proposal (PPP) is available. During periods of no active PPP, all sPENDLE holders remain eligible for sPENDLE yield distributions. sPENDLE deployed in eligible DeFi integrations will be considered “active” at all times.”
Interoperability and Real DeFi Utility in Focus
Pendle’s token upgrade is designed for a broader DeFi ecosystem. The vePENDLE token was largely locked into the protocol’s own governance system. But the new token could be easily integrated with external protocols. This means that users can use their staked tokens across lending markets, decentralized exchanges, and other yield strategies without losing their staking benefits.
The new model also aligns with the growing restaking trend in 2025. The token permits users to reuse the same capital across multiple protocols or layers at once. This helps in increasing both utility and potential returns.
In practical terms, users can stake PENDLE to receive sPENDLE. They can also use the same sPENDLE as collateral in a lending platform, while earning protocol rewards. This shift transforms sPENDLE from a locked governance token into a flexible asset in the DeFi space.
