Pendle Revamps Governance Token to Drive User Adoption The decentralized finance protocol Pendle is initiating a significant overhaul of its governance token model. The project will begin phasing out its existing vePENDLE token this month, replacing it with a new token called sPENDLE. This shift is a direct response to what the protocol identifies as low adoption of its current governance system, with the team aiming to introduce a more flexible and accessible model. The core change moves away from the vote-escrowed, or veToken, model. Under the old system, users locked their PENDLE tokens to receive vePENDLE, which granted governance rights and boosted rewards. A major drawback was the inflexibility of lock-up periods, which could extend for years, making the system unattractive to many potential participants. The new sPENDLE model is designed to be more liquid and user-friendly. Instead of locking tokens for a fixed duration, users will now be able to stake their PENDLE to mint sPENDLE. This sPENDLE will still confer governance power and a share of protocol revenue, but crucially, it can be unstaked at any time. The trade-off is that the longer a user holds sPENDLE, the greater their voting power and reward multiplier becomes, incentivizing long-term alignment without forced lock-ups. Pendle’s team believes this flexible, loyalty-based system will lower the barrier to entry for governance participation. By removing the commitment of a long-term lock, they hope to attract a broader base of users who were previously hesitant to participate. The protocol anticipates that increased governance engagement will lead to a more robust and decentralized ecosystem. The transition will be gradual. Existing vePENDLE holders will be able to migrate their tokens to sPENDLE at a one-to-one ratio. The protocol has outlined a phased plan where vePENDLE will eventually be fully deprecated. All existing governance proposals and reward distributions tied to vePENDLE will be seamlessly transferred to the new sPENDLE framework. This move reflects a broader trend in DeFi where protocols are reevaluating complex tokenomics in search of more sustainable and engaging models. The veToken model, popularized by protocols like Curve Finance, has been criticized for creating illiquidity and favoring large, long-term holders excessively. Pendle’s pivot to a more fluid staking model is a notable experiment in balancing incentives for commitment with the need for user-friendly access. The success of this revamp will be measured by whether it can stimulate greater participation in Pendle’s governance and increase the overall utility of the PENDLE token. The protocol, which allows users to tokenize and trade future yield from assets like liquidity provider positions, is betting that a more adaptable governance token will drive deeper integration and growth across its ecosystem.
