New Trends in the Pendle Ecosystem: Analysis of the Equilibria Project

Pendle's TVL and token price have achieved a tenfold increase, and its flywheel growth effect is about to kick in. As a token that adopts the ve-tokenomics mechanism, Pendle currently lacks projects similar to Convex to fully realize its potential. Equilibria was born for this purpose, and this article will analyze its mechanism and the value it brings to Pendle and the interest rate swap space.

vePendle has the following rights:

1. Voting decisions for incentive distribution participation
2. Increase the returns of the PT/SY pool
3. Earn 3% YT interest yield
4. Earn 80% of AMM trading fees

These rights are comparable to the current industry benchmark veCRV and are of considerable value.

However, the two-year maximum lock-up period has had a certain impact on its liquidity. Equilibria's operating model is similar to that of a well-known project; it permanently locks vePendle and provides users with ePendle tokens, assisting Pendle's AMM LP in enhancing yields, and then distributes part of the enhanced yield to ePendle and vlEQB holders, while vlEQB enjoys bribery rewards.

Pendle's recent surge is primarily attributed to the mechanism updates brought by the V2 version, as well as the rise of long-term yield sectors such as LSD and derivatives, providing Pendle with a stable source of assets.

However, Pendle's potential in bribery has not yet been fully developed. Professional institutions hold a large share in LSD, and these institutions have a strong demand for regular returns. Theoretically, the LSD protocol has room for bribery in Pendle to meet the demands of these institutions.

Although Pendle has been operating for two years, only 30M of the 150M circulating Pendle is currently locked, with 120M still in circulation, providing an opportunity for Equilibria's early growth.

Equilibria recently announced that it will launch an event in May, airdropping 2% of the total EQB tokens based on the amount of Pendle deposited by users, which is expected to lock up a significant amount of circulating Pendle. Additionally, since core members of the Pendle team are also involved in its multi-signature management, a considerable amount of Pendle held by the treasury and the team may flow in, potentially further enhancing Pendle's overall locking ratio.

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 will have the opportunity to continuously benefit from bribery yields.

Since ePendle and vlEQB are also yield-bearing assets, theoretically they can be combined with Pendle to build their own YT/PT, achieving fixed rates to better serve institutional clients, while further promoting the development of the Pendle ecosystem and realizing the flywheel growth of TVL. Even after Equilibria opens this path, other wrapping projects of ve-tokens may also draw from and integrate into the Pendle ecosystem, helping Pendle to expand into new market areas.

In summary, Equilibria, as a key project within the Pendle ecosystem, will further unleash Pendle's potential, helping to achieve flywheel growth and activate the ecological development of the interest rate swap track.