Analysis: Pendle's New Staking Mechanism Suffers from Incentive Imbalance, May Struggle to Reduce Circulating Supply

Odaily News Blockworks researcher Kunal Doshi posted on X, stating that Pendle's newly launched staking mechanism, sPENDLE, may not achieve the "token lock-up" (reduction of circulating supply) effect that many expect.

Pendle has granted significant multiplier bonuses to existing vePENDLE stakers, allowing such users to achieve a much higher Annual Percentage Yield (APY) compared to new stakers. The current average lock-up period for vePENDLE is approximately 1.54 years, which translates to roughly a 3.31x yield multiplier when converting to sPENDLE. This multiplier will gradually decay as the unlocking process progresses.

This creates a clearly imbalanced incentive structure: new stakers only receive an APY of about 5%–7%, while vePENDLE stakers benefiting from the multiplier can earn 16%–24%. The yield for new stakers is too low to attract a sufficient scale of new tokens to be staked. For sPENDLE to truly function in reducing supply, it must rapidly amplify protocol revenue through Boros and Pendle V2, thereby raising the overall staking yield. Otherwise, genuine staking demand might only emerge at a much later stage, specifically after the multiplier for vePENDLE stakers has decayed.

Yesterday, Pendle announced the launch of its liquid staking token, sPENDLE, replacing the multi-year lock-up model of vePENDLE.