Pendle Launches sPENDLE Staking Replacing vePENDLE Locks Model

• Pendle launches sPENDLE on Jan. 20, replacing vePENDLE locks with liquid staking.
• More than 80% of Pendle revenue will fund PENDLE buybacks for sPENDLE holders.
• Pendle shifts to algorithmic emissions, targeting a 30% reduction in token emissions.

Pendle has launched sPENDLE, a liquid staking token that will replace vePENDLE over time. The protocol said sPENDLE staking opens on January 20, shifting governance and rewards to a more liquid format.

The rollout targets long lockups and complex voting incentives. Pendle said sPENDLE uses a 14-day withdrawal period and supports instant redemption for a 5% fee.

Pendle sPENDLE staking

Pendle said sPENDLE becomes the protocol’s primary governance token and rewards asset. The transition will phase out vePENDLE as the platform’s main voting and incentive mechanism. New vePENDLE locks will not continue indefinitely under the plan. Pendle said it will pause vePENDLE locks on January 29, alongside a broader incentive changeover. 

The protocol described the upgrade as a response to vePENDLE’s adoption limits. Pendle said internal analysis showed the system created barriers for many users. Long-term locking contributed to those barriers, according to Pendle. The protocol said multi-year locks reduced capital flexibility and discouraged participation. 

vePENDLE’s non-transferable structure also mattered in the review. Pendle said that design limited DeFi (decentralized finance) composability and reduced ways to use positions across other dApps.

Pendle said engagement stayed limited under that structure. It reported that only about 20% of PENDLE supply was actively engaged in vePENDLE participation.

Revenue buybacks send PENDLE rewards

Pendle said the new design aims to keep users liquid without losing reward access. sPENDLE holders can exit with a 14-day withdrawal period, rather than multi-year locks. In addition, Pendle said holders can choose faster liquidity through instant redemption. The protocol set that option at a 5% fee, positioning sPENDLE as more flexible than vePENDLE.

Pendle described sPENDLE as fungible, transferable, and composable, allowing integration across DeFi applications while maintaining eligibility for distributions. Protocol revenue plays a larger role under the revised model, Pendle said. The protocol plans to direct more than 80% of revenue toward PENDLE buybacks.

Those buybacks will fund distributions to eligible sPENDLE holders, according to Pendle. The protocol said rewards will come through airdrops and fee-funded distributions tied to the buyback flow. Pendle cited past revenue performance to explain the shift in structure. The protocol said it generated over $37 million in 2025, while the distribution model still concentrated benefits.

Eligibility rules will shift during withdrawals, Pendle said. Holders with queued withdrawals will not earn rewards or vote during the unstaking period.

Meanwhile, Pendle said holders remain eligible even if they do not vote, unless a live PPP (Pendle Protocol Proposal) requires action. If a PPP is active and a holder does not vote, Pendle said the holder forfeits rewards for 14 days.

Algorithmic Emissions

Pendle said it will replace manual voting incentive distribution with an algorithmic emissions model. The change targets more efficient rewards allocation across pools. The protocol said the model will use data-driven KPIs (key performance indicators) to route incentives. Consequently, Pendle expects improved allocation efficiency and stronger capital discipline.

Pendle said the redesign aims to reduce overall token emissions by about 30% while improving incentive distribution efficiency. Existing vePENDLE holders will receive transition benefits under the plan. Pendle said they will receive a boosted sPENDLE of up to 4x, based on remaining lock duration.

A snapshot on January 29 will record vePENDLE balances and lock periods for conversion calculations, Pendle said. The protocol added that the boost will decay linearly toward 1x and expire after two years.

Market activity rose as the overhaul rolled out, based on the provided figures. PENDLE price traded around $2.07, up 9% in 24 hours, with spot volume up over 40% to $90 million and open interest up nearly 10% to $45 million.

Pendle’s next milestones arrive quickly. sPENDLE staking begins January 20, while January 29 brings the vePENDLE lock pause, the snapshot, and the new incentive structure.