Decentralized finance platform Pendle reached an all-time high in total value locked (TVL) denominated in U.S. dollars on Wednesday, a sign of substantial growth for the nearly three-year-old protocol, which is known for its token standard for yield generating mechanisms. 

According to blockchain analytics firm DefiLlama, crypto users have locked more than $5.78 billion worth of crypto assets into the protocol at the time of publication. That’s a 40% increase from $4.08 billion at the beginning of May and a 2,350% jump since the start of 2024 when the figure stood at $233.67 million.

Pendle’s TVL has risen to its all-time high in dollar terms in part because ETH has jumped nearly 26% in the past week. ETH is now trading around $3,740 as a result of increased optimism about the United States Securities and Exchange Commission potentially approving spot ether exchange-traded funds (ETFs). 

The DeFi protocol’s TVL denominated in ETH, while not at its peak, is nearing its all-time high of 1.6 million ETH, first reached on April 25. At presstime, Pendle TVL in ETH stands at over 1.55 million ETH. 

Pendle Finance creates a yield market for crypto users by separating yield-bearing cryptocurrencies into principal and yield tokens. Users can earn fixed yield, go long yield by purchasing more yield tokens, and provide liquidity to the platform.

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“Pendle has become an attractive place for speculators to deposit and leverage their ETH and other assets to earn outsized returns in yield or points,” wrote Edward Wilson, the social media manager for onchain intelligence firm Nansen, in a Telegram message to Unchained. The protocol’s TVL shows that “the demand for Pendle’s products remains very high.”

A Popular Parking Spot For Crypto-Assets

In addition to the price appreciation of ETH, Pendle’s achievement in locked value stems largely from users depositing a number of different crypto assets into the DeFi protocol in an effort to earn a yield. 

Pendle’s eETH smart contract holds the most wrapped eETH of all smart contracts holding wrapped eETH, the flagship product of native Ethereum liquid restaking protocol EtherFi.  Per Nansen, Pendle’s eETH smart contract holds 365,503 wrapped eETH tokens, worth about $1.4 billion, representing about 31.94% of the total supply wrapped eETH. 

A different Pendle smart contract is also the third-largest holder of liquid restaking protocol Renzo’s ezETH, with over 162,504 tokens worth about $594.9 million, trailing behind the smart contracts for Zircuit’s liquid staking token pool and Renzo’s lockbox, per Nansen.

And another Pendle smart contract is the third-largest holder of Ethena’s synthetic dollar USDe, with over $369 million held. That amounts to roughly 14.48% of the total USDe supply, data from Nansen shows.

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Each of these tokens – eETH, ezETH, and USDe – if deposited into Pendle will fetch the depositor double-digit yields, according to DefiLlama. Pendle holding large amounts of liquid restaking tokens highlights how its “TVL has grown to where it is now due to the points meta popularized by EigenLayer, allowing users various options depending on their risk appetite,” Pendle developer RightSide wrote in a Telegram message to Unchained. 

EtherFi and Renzo, which both collaborate with EigenLayer, have not only implemented a points program, but also conducted airdrop allocations for early adopters.

“Pendle remains one of the avenues to offer some of the highest yields for $ETH and stablecoins ($USDe) … attracting capital from various users in DeFi whether retail, DeFi builders such as Silo, or institutional players,” RightSide added. 

The price of PENDLE has dropped 5.8% in the past 24 hours but increased 37.6% in the past seven days to trade at $6.00, according to CoinGecko.