After experiencing very rapid growth in the first half of 2024, the Pendle protocol now needs to reinvent itself to continue attracting users. We spoke to its CEO, TN Lee, in a video interview.

It's the surprise of recent months in decentralised finance (DeFi). Deployed on Ethereum in June 2021, Pendle has found success by riding the wave of point-based airdrops (EtherFi, EigenLayer, Mode, etc.)

Its total embedded value (TVL) rose from around $250 million to $6.7 billion at its peak in June. It was around $2.7 billion at the end of August.

If Pendle has become a DeFi star, it is largely because it allows its users to have quite a lot of leverage on returns or airdrop points that can give access to a project's native tokens.

>> To read: Pendle's fundamental analysis

The protocol co-founded by its current CEO, South Korea's TN Lee, also experienced a significant 40% fall in its TVL at the end of June, largely due to the maturity of several of its liquidity pools that can be likened to a kind of futures contract.

Source: DefiLlama

To reinvent itself, Pendle has drawn up a plan for the "next 2 to 3 years". Here's the outline of it, from our video interview with TN Lee.

👉 The coming wave of Bitcoin ecosystem airdrops

As with Ethereum a few months ago, the Bitcoin ecosystem is about to experience the wave of restaking, largely driven for now by the Babylon protocol, synonymous with new sources of returns for holders of the premier cryptocurrency.

Pendle intends to ride this wave. According to our information, it is well on the way to concluding numerous partnerships with projects with a view to offering leverage on points linked to airdrops as well as returns on stablecoins based on Bitcoin. The blockchain has more and more projects of this type, such as Stacks, RSK and BTCFi.

"Staking and restaking on Ethereum have shown that it is possible to attract new sources of liquidity. We think Bitcoin will do the same, especially as it is still the benchmark asset and the one best understood by traditional finance," detailed the Pendle co-founder.

👉 A long-awaited V3

Without revealing too many details, TN Lee nonetheless gave some good hints about the protocol's upcoming developments, and in particular its forthcoming V3.

"V3 is not intended to replace the current version of Pendle but rather to be complementary," explained the South Korean entrepreneur. "One of the main objectives of this new version will be to enable the major players to trade token returns in much larger volumes."

With its V3, Pendle also aims to be more agnostic in terms of blockchain to, in particular, enable its users to trade native assets on different networks, even present outside the EVM ecosystem such as Solana.

👉 Launching a blockchain is not on the agenda

While other projects such as Aave have decided to take the plunge, Pendle is ruling out launching its own blockchain for the time being.

"At the moment, we don't have a large enough trading frequency to consider it. However, our V3 will also aim to increase our trading frequency. If our traction increases significantly, it could then make sense to launch our own network in a few years' time," he explains.

Find our interview on X (ex-Twitter) and YouTube.

This analysis does not constitute investment advice. It has been written without taking into account your personal circumstances, including your financial situation, risk profile and investment objectives.

Before investing in any product, investors should fully understand the risks involved and consult their own legal, tax, financial and accounting advisors.