Pendle TVL Drops Nearly $3 Billion in 7 Days

The Total Value Locked (TVL) in Pendle Finance has decreased by over 40% in the past week after several products matured on June 27.

Pendle TVL Drops Nearly $3 Billion in 7 Days

According to data from DefiLlama, the DeFi protocol developed on Ethereum, Pendle Finance, saw around $3 billion withdrawn from the protocol when several of its products matured at the end of June.

Pendle's TVL from May 2024 to July 2024. Source: DefiLlama

In just one week, Pendle's TVL plummeted from $6.2 billion to $3.7 billion by July 1, marking a roughly 40% decrease in total value locked (TVL). Most of the assets withdrawn were liquid restaking tokens.

Top 5 Tokens That Matured on Pendle on June 27. Source: Pendle

Ian Unsworth, founder of Kairos Research, confirmed:

"This decline is due to the top five LRTs on Pendle all maturing on the same day."

Following the maturity of these markets, Pendle announced the launch of "Matured pools," suggesting that the new markets would outperform the previous ones with updates that facilitate user interaction with the protocol.

However, the returns offered by the "Matured pools" have not been sufficient to attract investors to continue depositing funds into Pendle, resulting in a significant withdrawal of assets from the protocol.

The decline in Pendle's TVL also impacted related protocols. For example, the Layer-2 protocol Zircuit, with its rsETH token, saw a more than 15% drop in TVL after maturing on Pendle.

Zircuit's TVL from May 2024 to July 2024. Source: DefiLlama

This massive withdrawal may also be due to users moving their tokens to "airdrop hunt" on protocols similar to Pendle that have not yet launched tokens, such as EigenLayer, Renzo, and Ether.Fi.

Users always seek to maximize returns on their assets, and airdrop events present a good opportunity to increase value without additional capital investment. Therefore, they often rotate their capital from older projects to protocols with airdrops and higher growth potential, despite recent airdrops performing poorly and increasing skepticism that the airdrop era is over.

In the past week, the price of PENDLE has also seen a drop of over 20% and is currently hovering around $4.9.

4H Chart of PENDLE/USDT Trading Pair on Binance at 01:30 PM on July 2, 2024