Pendleâs Tweet That Puts Magpie and Penpie on the Ropes"
âcontentâ: "Look, what Pendle announced in that tweet â essentially a native âlock-and-liquifyâ for PENDLE that the Pendle team itself calls xPENDLE â radically changes the game. In two sentences: from now on, anyone can lock PENDLE within the official app, receive a liquid token representing vePENDLE in return, continue collecting vePENDLE fees, and, if they want, sell or use that token as collateral without going through a third party.
First, letâs understand where the money was coming from. Until yesterday, the easiest route for a retail user who wanted yield from vePENDLE was to give their PENDLE to Penpie. Penpie locks them for two years, generates vePENDLE, collects the Pendle fees, and, on top of that, keeps a percentage of the tips â the bribes, which are incentives paid by other protocols for you to vote for their pool. Then it distributes a portion of all that in mPENDLE and PNP, its own token. The model is a carbon copy of what Convex did with Curve.
With xPENDLE, Pendle cuts out the middleman. The user locks their tokens, receives their liquid token, can vote themselves or delegate with a couple of clicks, and collects the same tips without paying the commission that Penpie was taking. This direct cut reduces the flow of PENDLE to Penpie and, by extension, to Magpie Megadao, because remember that Magpie is the parent company that groups three sub-DAOs: Magpie (veWOM), Penpie (vePENDLE), and Radpie (veRDNT). Fewer deposits mean less new vePENDLE, which in the medium term erodes the voting share that Penpie already controls; its votes are diluted epoch after epoch while the total vePENDLE pie continues to grow thanks to Pendle itself.
Yes, Penpie keeps the vePENDLE it has already accumulated â about forty-three million units according to the official dashboards â but the compounding advantage disappears. Until today, Penpie was adding around seven or eight million PENDLE tokens locked per quarter, a pace that allowed it to maintain its position at around twenty percent of the vote. If new deposits slow down because people prefer xPENDLE, those locks stagnate while the weekly PENDLE inflation continues and competitors gain ground. The result: less voting power, fewer bribes allocated, less revenue to distribute, and therefore less incentive to deposit⌠a classic vicious cycle.
And what about Magpie as a holding company? Its pitch to investors was to become the great cross-chain aggregator of veTokens: you deposit pure tokens, and they return liquid tokens that yield more because they pool critical mass, maximize the âboost,â and centralize bribe trading. Pendleâs move demonstrates that base protocols wonât always tolerate a third party capturing value indefinitely. With Wombat, there was never a native competitor, nor with Radiant, but Pendle has just shown the way. This disrupts the âmega-DAOâ narrative and complicates raising new capital.
However, this is not the end of Penpie, only the end of Penpie 2.0, which thrived on being a simple locker. The path to reinvention involves three approaches. First, offering packaged strategies that the native protocol wonât provide: automatic looping of PT against lending markets, YT collars to protect rates, and vaults that combine Pendle with the new restaking points. Second, becoming the neutral bribe marketplace that aggregates and auctions votes not only from vePENDLE but also from veWOM, veRDNT, and any other veToken; itâs more convenient for issuing projects to bribe on a single front-end than on five. And third, tokenizing its own fee streamâan on-chain bond backed by historical cash flowâand using it as collateral. This would give PNP real utility beyond the governance function that almost no one values ââtoday.
Thereâs some political timing involved here. Pendle keeps sixty percent of the trading fees and distributes eighty percent of that to the lockers. With the emergence of xPENDLE, that revenue stream goes directly to the end userâs pocket. If Penpie wants to continue capturing value, it must offer an extra yield that compensates for its commission. This could be achieved by combining bribes from multiple protocols, front-running yield via flash loans, or, most obviously, negotiating an additional revenue share with Pendle in exchange for continuing to distribute institutional incentives.
Is this possible? Yes, but it requires moving quickly. The Penpie contract needs a version three that accepts xPENDLE as collateral and allows for seamless migration: you deposit PENDLE, and Penpie decides on your behalf whether itâs more advantageous to lock it in vePENDLE or use xPENDLE as collateral in Morpho to leverage PT loops. If they manage to abstract this logic, the user only has to press a single button again, and the convenience advantage reappears. Follow the money: in the age of points and airdrops, the most lucrative asset isnât the veToken, but the deployed liquidity units that generate double or triple rewards. Penpie can position itself right there, making it easier for farming funds to enter with leverage without having to understand every new LRT or every new restaker. This requires spending on development, yes, but it also opens up performance and origination fees that Pendle, as a neutral protocol, wonât pursue because it would dilute its âinfrastructureâ proposition.
In short: Pendleâs tweet doesnât kill Penpie, but it cuts off its easy growth path and forces it to change its model. It takes away Magpie Megadaoâs calling card of âwe are the dominant vePENDLE accumulatorâ and demands that it prove it can be more than just a collective locker. The next logical step is for Penpie to declare itself a âstrategies layerâ on top of Pendle, launch vaults with managed risk, and become a multi-chain bribe broker. If they delay in doing so, xPENDLE and any other native locker that Pendle launches afterwardâthereâs already talk of rlPENDLE for restakingâwill steal their deposits and, with them, the traction of their PNP token.
This is my interpretation of the situation. Pendle keeps the easy part of the business; Penpie has to move up a step in the value chain or accept that its days of printing money with a simple mToken are over.