Pendle: The token has fallen by nearly 80%, but the project itself has grown stronger

PENDLE is trading around $1.52. In April 2024 , the token hit an all-time high of $7.50, after which it lost nearly 80% of its value.

At the same time, the protocol itself has moved in the opposite direction. Today, Pendle’s market capitalization stands at approximately $262 million, its FDV at approximately $430 million, and its TVL exceeds $1.17 billion.

This creates an interesting situation. The market values the entire project at significantly less than the value of the assets that users have entrusted to its smart contracts.

The main question is no longer whether PENDLE can return to its previous high. What’s far more interesting is this: Is the market truly undervaluing Pendle, or does the low price reflect fundamental problems that aren’t yet visible in the TVL?

Why did Pendle become such an important project in the first place?

Until 2023, Pendle remained a niche DeFi protocol. That all changed with the emergence of liquid staking, restaking, and yield-generating assets like USDe.

Investors didn't just want to earn a return; they wanted to manage it. Some wanted to lock in their profits early, while others, on the contrary, were willing to take a risk for the sake of higher returns or future airdrops.

That is exactly the problem Pendle solved.

The protocol allows an income-generating asset to be divided into two parts.

A PT (Principal Token) entitles the holder to receive the underlying asset on the maturity date.

YT (Yield Token) entitles the holder to receive all returns and additional rewards up to that date.

In effect, Pendle has created a market where future returns can be traded separately.

Why PT Could Become Pendle's Flagship Product

At first glance, it might seem that what matters most about Pendle is its user-friendly interface or high returns. In reality, something else is far more important.

PT gradually converges toward the value of the underlying asset and has a fixed maturity date. This makes it a much more predictable collateral for lending protocols than many conventional crypto assets.

That is precisely why PT began integrating Morpho and Aave.

The next step was PT Looping. Users can pledge PT as collateral, take out a loan, buy additional PT, and repeat the cycle several times to increase their fixed return.

For investors, it is not the mechanism itself that matters here.

What's important is that PT is gradually transitioning from being an internal product of Pendle to becoming a full-fledged asset that other major DeFi protocols are beginning to use.

The more of these integrations there are, the greater the likelihood of increased liquidity and higher fees for Pendle itself.

How much does Pendle earn?

As of today , Pendle's TVL stands at approximately $1.17 billion.

Over the past 30 days, the protocol has received approximately:

• $835,000 in commissions;
• $824,000 in revenue;
• More than $65 million in commissions since its inception.

If we maintain the current pace, annual revenue will total approximately $24 million.

This already allows us to evaluate Pendle as a fully-fledged business, rather than simply based on the amount of locked-up funds.

However, there is an important detail.

The protocol's revenue is heavily dependent on market activity. During the best quarters of 2025, Pendle generated significantly more revenue than it does now. Therefore, it would be a mistake to evaluate the project based solely on its current revenue.

How fees begin to affect the token price

One of the most significant changes in recent months has been the transition to sPENDLE.

Previously, the token was mainly used for protocol governance. Now, its economics are directly linked to Pendle's financial performance.

Up to 80% of the fees are used to repurchase PENDLE from the market. These tokens are then distributed among sPENDLE holders.

The result is a simple chain.

More users → more fees → more PENDLE buybacks → higher rewards for sPENDLE holders.

At the current level of revenue, the amount of funds potentially allocated to share buybacks is estimated at approximately $19 million per year.

It is important to understand that repurchased tokens are not burned. They remain within the ecosystem and are transferred to long-term holders.

During the first few months of the new model’s operation, the Pendle team reported that it had repurchased more than 2 million PENDLE and reduced the supply by approximately 71%. These figures were published by the project itself and have not yet been independently verified.

Emissions no longer seem to be the main problem

The main vesting period for the team and early investors ended back in 2024.

Today, new tokens are issued primarily as part of liquidity incentive programs.

According to current estimates, the value of the annual issuance is approximately $7 million, while the potential annual buyback volume is close to $19 million.

If this trend continues, the protocol's cash flow will be able to cover the current issuance of new tokens.

But this balance depends directly on the fees. If user activity declines, the volume of buybacks will also decrease.

What would it take for the market to reevaluate Pendle?

TVL growth alone will no longer be the main driver.

Several other factors are much more important:

• further increases in fees;
• expanded use of PT in Morpho, Aave, and other lending protocols;
• maintaining the volume of buybacks above the cost of new issuances;
• an increase in the number of sPENDLE users.

If these conditions are met simultaneously, Pendle’s intrinsic value may indeed turn out to be higher than what the market is currently pricing in.

KLЁ's Opinion

Pendle is interesting not because its token is trading at nearly 80% below its all-time high. A price drop alone never makes an asset attractive.

What’s far more important is that, over the past two years, the project has evolved from an unconventional idea into a fully-fledged yield market infrastructure. Today, Pendle no longer simply aggregates liquidity; it is beginning to generate real revenue and link the value of its token to the protocol’s financial performance.

That said, it is still too early to say that the stock is clearly undervalued. Pendle’s revenue remains cyclical, and further growth depends directly on the extent to which PT can be adopted outside its own ecosystem.

If, a year from now, we see steady growth in fees, new PT integrations, and buybacks remaining above the current issuance rate, then the market will have compelling reasons to value PENDLE significantly higher. In my view, these are the metrics we should be watching much more closely today than daily price fluctuations.