Pendle ecosystem welcomes new rise momentum

Pendle has recently achieved significant rise in both TVL and token price, and its flywheel effect is about to launch. As a token that adopts the ve-tokenomics model, Pendle currently lacks projects like Convex to fully realize its potential. Equilibria has emerged to fill this gap. This article will analyze the mechanisms of Equilibria and its impact on Pendle and the interest rate swap space.

vePendle holders can enjoy multiple benefits, including determining incentive distribution, enhancing PT/SY pool yields, earning 3% of YT interest income, and receiving 80% of AMM exchange fees. These benefits are no less impressive than the current benchmark veCRV and are quite valuable.

However, the two-year longest lock-up period has had a certain impact on its liquidity. Equilibria's operating model is similar to Convex, providing ePendle tokens to users through the permanent locking of vePendle, assisting in enhancing Pendle's AMM LP yields, and sharing some of the enhanced yields with ePendle and vlEQB holders, among which vlEQB will also receive additional incentive yields.

Pendle's recent rise is attributed to the mechanism updates brought by the V2 version on one hand, and on the other hand, the emergence of sectors like LSD and derivatives that can generate long-term returns, providing Pendle with a stable source of assets. However, the potential for incentives in Pendle has not been fully explored. The professional institutions that occupy a large share in the LSD field have a strong demand for regularity, which creates opportunities for incentivizing the LSD protocol on Pendle.

Although Pendle has been operating for two years, only 30 million out of 150 million circulating Pendle is currently locked, leaving room for the early development of Equilibria. Equilibria recently announced that it will launch an event in May, airdropping 2% of the total EQB tokens based on the amount of Pendle users deposit, which is expected to lock a significant amount of circulating Pendle. Additionally, with core members of the Pendle team participating in the multi-signature management of Equilibria, the Pendle held by the treasury and the team may also flow in large quantities, potentially further increasing the overall locking ratio of Pendle.

In addition, Pendle's tokenomics plan implements a 2% perpetual incentive inflation after the rapid inflation period ends in 2026, which means that vePendle/vlEQB holders will have the opportunity to continuously benefit from incentive earnings.

Since ePendle and vlEQB are also interest-bearing assets, they can theoretically be combined again with Pendle to construct their own YT/PT, achieving fixed rates and better serving institutional clients, while further promoting the development of the Pendle ecosystem and forming a flywheel rise of TVL. After Equilibria opened this path, other ve-token packaging projects may also follow suit and connect to the Pendle ecosystem, helping Pendle expand into new market areas.

In conclusion, Equilibria, as a Convex class project of Pendle, will further unleash Pendle's potential, promote its flywheel rise, and activate the ecosystem of interest rate swaps.