Decentralized Finance yield platform Pendle is set to replace its vePENDLE token as its primary governance and reward token, arguing the previous design held back broader adoption.
In an announcement via X on Monday, Pendle unveiled sPENDLE, its new “liquid staking token” that will soon replace vePENDLE as the primary governance token on the protocol.
“We’re excited to introduce sPENDLE, the next evolution of Pendle tokenomics. This upgrade is designed to address critical limitations of the vePENDLE system, while unlocking new opportunities for PENDLE holders and the protocol,” Pendle said.
sPENDLE is a liquid fee and governance token with a 14-day withdrawal period, the team added.
Source: Pendle
sPENDLE staking will go live on Tuesday, while vePENDLE locks will be paused on Jan. 29. A snapshot will then be taken of user vePENDLE balances to aid with the switchover.
On the same day, the new governance structure under sPENDLE will fully roll out.
According to data from DeFi Llama, Pendle is the thirteenth-largest Decentralized Finance (DeFi) platform in terms of total value locked at almost $3.5 billion.
Better tokenomics a possible boon for Pendle users
In the post, Pendle said that despite strong platform growth over the past couple of years, vePENDLE ultimately caused “significant barriers” that limited “broader adoption.”
One key factor was the long lock-up times for the asset, in which users could not get their funds back until the set time periods were over.
Pendle said it was designed to drive long-term “commitment” to the protocol, but failed to achieve its goal. To address this, sPENDLE can be locked up and withdrawn at any time following a 14-day unwinding period, or instantly for a 5% fee.
Other problems included the lack of interoperability of vePENDLE, as it was non-transferable, meaning that it couldn’t be utilized across other DeFi platforms.
To address this, sPENDLE will be integrated with a number of DeFi platforms, enabling the asset to be used for purposes such as restaking.
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Pendle also said the governance structure was too complicated for the majority of users, as it required active weekly engagement to earn rewards from governance contributions.
“The weekly vote-to-earn system required a deep understanding of DeFi and market dynamics to optimize rewards,” Pendle said.
“Despite generating over $37M in 2025, the complex voting mechanics meant that rewards concentrated among vePENDLE holders with enough expertise to navigate the system effectively – a tiny fraction of users,” Pendle added.
To resolve this, Pendle is introducing a new governance structure that makes it much easier for holders. Instead of weekly engagement, holders will only need to vote for “critical” Pendle Protocol Proposals (PPP) to remain eligible for governance rewards.
When there is no PPP to vote on, they will automatically remain eligible.
Under this structure, Pendle will also conduct PENDLE token buybacks using “up to 80% of protocol revenue” to distribute as governance rewards.
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