Key Insights:
- PENDLE governance commences when PENDLE leaves, making it easier for holders to participate.
- sPENDLE enables liquid staking with soft exits and rewards based on protocol performance.
- Following the MakinaFi hack, DeFi sentiment remains low, and Pendle continues to thrive despite governance reforms.
Pendle is evolving to a new model of governance that paves the way for holders to participate, yield, and replace vePENDLE with liandENDLE, in line with verbal restrictions in the old design that curtailed engagement.
Pendle Introduces sPENDLE as Primary Governance Token
In a follow-up to an X post, the team shared a slow shift, which will make sPENDLE the primary means of control and fee-carrying for the protocol.
According to the announcement, the change is intended to address lock-up rigidity, limited interoperability, and governance complexity associated with vePENDLE.
Pendle stated that sPENDLE will function as a liquid governance and fee token with a 14-day withdrawal period. A snapshot of existing vePENDLE balances will then be taken to facilitate the transition.
Source: Pendle
On the same day as the snapshot, Pendle plans to roll out its revised governance framework under sPENDLE fully. The protocol stated that the new structure is designed to lower participation barriers while preserving governance incentives tied to protocol performance.
According to DeFi Llama data, Pendle is the 13th-largest DeFi platform by total value locked, with almost $3.5 billion in assets locked at the time of the announcement.
Pendle Says vePENDLE Lockups Limited Adoption
Pendle explained that vePENDLE was originally designed to encourage long-term alignment with the protocol through extended lock-up periods. However, the team said the model created “significant barriers” for users, particularly those unwilling or unable to commit funds for long durations without flexibility.
According to the platform, this structure ultimately failed to broaden participation despite the platform’s overall growth over the past two years.
The protocol states that sPENDLE addresses this issue by allowing withdrawals at any time after a 14-day unwinding period. The optional instant exit mechanism was introduced to provide additional liquidity flexibility while maintaining a cost for immediate withdrawal.
Pendle Targets Interoperability and Simpler Governance
Pendle clarified that sPENDLE will be connected to several DeFi platforms and can be applied across the ecosystem. The protocol did not outline which platforms would be to provide additional but confirmed that interoperabmaintaining one of the major featuresesignprincipal-based withdrawalsen.
A challenge of governance also became one of the issues. According to the vePENDLE, voters had to vote weekly to be eligible to receive governance rewards.
Pendle said this system favoured a small group of users with the expertise and time to manage voting strategies actively.
According to the protocol, the weekly vote-to-earn model concentrated rewards among a limited subset of vePENDLE holders, despite generating more than $37 million in revenue during 2025.
Under the new system, sPENDLE holders will only be required to vote on “critical” Pendle Protocol Proposals to remain eligible for governance rewards. When no such proposals are active, eligibility will be maintained automatically.
Pendle also said it plans to conduct PENDLE token buybacks using up to 80% of protocol revenue, with the repurchased tokens distributed as governance rewards.
DeFi Market Observes MakinaFi Exploit following Pendle Improvements
The Pendle announcement is part of the growing focus on DeFi security, triggered by a reported exploit of MakinaFi. The DeFi protocol was breached, and the theft of 1,299 ETH, which were worth $4.13 million at the time of the disclosure, occurred to the DeFi protocol, according to PeckShieldAlert.
PeckShieldAlert reported that on-chain statistics showed the stolen ETH was directed to two Ethereum addresses soon after the attack.
One address, identified as holding roughly $3.3 million, and a second address holding about $880,000, were flagged as initial destinations for the funds.
On-chain records from Etherscan indicated that at least one funding flow to the addresses involved an entity tagged as an MEV builder.
According to PeckShieldAlert, some transactions were preemptively executed, suggesting the exploit relied on time-dependent execution and transaction order.Market players are tracking that the attacker is converting ETH to fewer wallets or transferring it to mixers or centralized exchanges.
