The asset held by Penpie is vePENDLE, which is a locked asset. The core rule of veTokens is sacrificing liquidity in exchange for yield. From its inception, mPENDLE was designed as a “Perpetual Yield Certificate,” not a “demand deposit.” Demanding a 1:1 rigid redemption violates the underlying physical attribute of vePENDLE (which cannot be unlocked) and ignores the contractual spirit of the protocol.
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I’ve reviewed the DAT adjustment plan and am fully in support.
I particularly appreciate how the proposal handles the Treasury assets (specifically the 1.1M PNP and 2.6M mPENDLE) to compensate users during the conversion. The math behind the allocation seems to accurately reflect the scarcity premiums and eliminates the structural issues we’ve had.
Overall, I don’t see any major issues. I truly admire the fact that the treasury provided compensation for all assets to genuine users. Based on the current market strategy, holders of PNP and mPENDLE have also received corresponding compensation. Generally speaking, I am very optimistic about this transition from a dual-token model to a single-token model. However, I would like to pose one final question:
Is it possible for us to close this conversion after one year (or a specific timeframe, using one year as an example) and burn the corresponding OSTR tokens that haven’t been converted? Doing so would offer two benefits: 1. It would improve the overall Net Asset Value (NAV) of the protocol, and 2. It would relatively increase the intrinsic value of each OSTR token.
agree！
This is a wonderful Also and let’s hope it goes through asap
Apart from everything I hope we can finish all of the Coin transition in six months or twelve months
(second account, can’t post more than 3 replies apparently because “new account”, when my account is years old…)
PNP holders in favor of taking assets from mPendle holders, surprising !
As mentioned above, the minting ratio of PNP at the beginning was NOT even 1 mPendle = 0.78 PNP
That ratio implies PNP is worth as much as mPendle which is absolute bonkers, when all of the value is in mPendle.
I could agree to ~0.8 peg as a basis, but 0.57, which is justified by market valuations under previous terms, where that value has been impacted by the low liquidity, yield (at times lower than PNP users), and the hack Penpie suffered.
With the new Pendle terms, PNP is worthless, & pretending it’s worth half of the value of mPendle, through confiscation of the claim to the underlying vePendle is crazy.
vePendle is no more.
I didn’t agree to :
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Lock my Pendle for sPendle which is only going to have a 14 days redemption period OR
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Lock my Pendle to “finance a GameFi project” - That’s totally delusional & insane. No company with a funding multiple times superior to that of Penpie made GameFi work, but Penpie will. Crazy.
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Lock my mPendle to finance a DAT
Therefore the initial contract is moot.
All of this is just a pretense to give a claim to PNP holders to the underlying vePendle and in 2 years, everyone will be pushing for redemption, because GameFi WILL NOT WORK.
This is just forcing mPendle users into a forced conversion, on which they CAN NOT even vote.
This is a robbery.
Giving the same amount of tokens to PNP holders as mPendle, is saying that PT (mPendle) = YT (PNP) - The inevitable redemption of underlying which WILL happen in 2 years will be the end of this forced robbery.
4 Likes
Strongly agree! This proposal balances the perspectives of all holders and delivers a fair and optimized merged token distribution.
You, like many of us, opted into locking PENDLE on Penpie knowing it’s basically a one way door. You gave up the right to pull the original back the moment you minted mPENDLE, and since then you’ve also farmed multiple PNP airdrops.
So when I see this push, it doesn’t read like “protecting users,” it reads like a cash grab. PNP holders matter here.
Put it up for voting, let’s go. DATs are the future.
I never farmed any PNP airdrops, so I’m not sure what you’re talking about.
I locked under vePendle.
vePendle is no more.
Forcing mPendle holders unilaterally is too much.
If that proposal is so good, why not let it be voted on by mPendle holders ? Even if as just a consultation.
My main contention is the ratio is too in favor of PNP holders, not that PNP holders should receive nothing.
The value is generated through the locked vePendle.
Going 50/50 or less doesn’t appreciate that in any way, shape or form.
Not even allowing mPendle to have a say in that is also quite a lot.
The proposal currently is - And you can disagree, but that’s what it reads like for mPendle holders - :
”PNP holders, your token won’t receive any bribes any more - Do you want to merge with mPendle to save the value of your holdings, at no cost to you, and all cost to mPendle holders?”
The answer will obviously be yes, to the side of those who have nothing to lose & all to gain.
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Before discussing which strategic path is chosen, we need to address who has legitimate consent over this decision.
This proposal explicitly restructures the economic treatment of mPENDLE, which represents depositor owned exposure to Penpie’s vePENDLE position. mPENDLE holders are not passive observers here, they are the capital providers whose assets and future cash flows are being redefined.
Currently, only PNP holders have voting rights, while mPENDLE holders (whose principal is directly impacted) have none. That creates a fundamental legitimacy problem for any proposal that reallocates value between these two groups.
In DeFi, there are only two defensible ways to change depositor economics:
- Explicit depositor consent (via voting or equivalent governance rights)
- A clean opt-out / redemption path for those who do not consent.
Proceeding with a vote where only PNP holders decide how mPENDLE economics are altered and without granting mPENDLE holders a vote or an opt-out, is functionally a forced restructuring.
I’m not arguing that governance tokens shouldn’t govern strategy. I am arguing that no governance token should be able to unilaterally redefine depositor principal claims without depositor consent.
Before this moves to a binding vote, the proposal needs to clarify one of the following:
- How mPENDLE holders are given a formal voice on outcomes that affect their assets
- What explicit opt-out / redemption mechanism exists for mPENDLE holders who do not agree with the outcome
Without one of these, the “open discussion” risks being purely performative, because the affected stakeholders have no formal way to accept or reject the result.
I would strongly encourage the team to address this governance asymmetry first, before asking the community to debate implementation details.
2 Likes
Agree! It’s fair enough
The concerns raised regarding “decision-making rights” are misplaced in this context, as your argument fundamentally mischaracterizes the role of mPENDLE and the structure of the protocol.
1. The Foundational Structure of Penpie The vePENDLE position held by Penpie exists because users deposited PENDLE. In exchange, they received:
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1 mPENDLE: Representing the Yield Right (cash flow).
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A corresponding amount of PNP: Representing the Governance Right (voting power).
2. Separation of Rights The system was designed such that rights are explicitly separated. Therefore, pointing out that “only PNP holders have voting rights” while “mPENDLE holders do not” is not a flaw—it is the intended logic of the protocol. You cannot decouple the governance token (PNP) from the governance process.
3. Fairness and Good Faith The current proposal aims to distribute the protocol’s value reasonably and fairly. If vlPNP holders truly intended to “exploit” mPENDLE holders, they could have utilized their governance power to unilaterally decide that mPENDLE holders receive zero allocation of the new tokens.
However, the reality is the opposite: vlPNP holders are effectively subsidizing mPENDLE holders with an allocation equivalent to 1.1 million PNP shares. This demonstrates a clear gesture of good faith and sincerity, rather than an attempt to force a restructuring.
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Objectives
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Give mPENDLE holders a defined, enforceable exit that does not rely on thin DEX liquidity.
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Enable Penpie to launch sPENDLE-native products without being trapped by the legacy lock stack.
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Keep it fair under extremes: “everyone waits” or “everyone wants out now.”
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Preserve predictable economics for vlPNP while Phase 1 is temporary and rule-bound.
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Minimize governance discretion by defining revenue, routing, and closure rules up front.
Structure
Two books, one set of rules.
Definitions
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Net protocol revenue: all protocol fees, vote fees, and bribe revenue received by Penpie, net of (a) a fixed Ops and Safety Reserve and (b) any third-party pass-through amounts owed by contract. Excludes one-time recoveries and treasury asset sales unless explicitly approved by governance.
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Ops and Safety Reserve: fixed percentage of gross receipts used for audits, bug bounties, core dev, incident response, and critical operations (parameterized below).
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Liquid assets (for Lane B caps): PENDLE and stables held in the RV wallet; sPENDLE held in the RV wallet that can be withdrawn within 14 days; excludes LP positions, lent assets, unclaimed rewards, and any asset with withdrawal gates beyond the defined period.
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Retired mPENDLE: (a) mPENDLE acquired by RV-B and burned (or moved to an irrecoverable address) and (b) mPENDLE deposited into RV-A and locked (nontransferable) as claim collateral.
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Epoch: 7-day period.
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Final legacy lock expiry: the latest expiry across Penpie-controlled legacy locks (published on the dashboard along with the lock ladder).
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Unlock principal: PENDLE principal that becomes withdrawable as legacy locks expire.
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All allocation percentages apply to net protocol revenue (gross receipts minus Ops & Safety Reserve and pass-throughs) unless explicitly stated otherwise.
Book 1: Legacy Runoff
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All existing vePENDLE (and any legacy pool incentives/fees) run off per their natural schedule.
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Any legacy cashflows and unlock principal controlled by Penpie are routed to the RV under the routing rules defined below (including 100% principal routing).
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Principal routing is mandatory: all PENDLE principal unlocked from legacy vePENDLE is routed to the RV until the legacy stack is exhausted (independent of Phase 1 revenue split).
Book 2: New sPENDLE Strategy
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Launch vaults that accept PENDLE → sPENDLE and sPENDLE directly.
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Strategy fees become a new revenue stream that can partially fund redemption during Phase 1 and later flow to governance token holders.
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Strategy operations must be kept distinct from the RV (separate accounting and reporting) to avoid cross-subsidization ambiguity.
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RV assets are not deployed into third-party strategies other than holding sPENDLE for liquidity management. Any yield-seeking strategies occur only in Book 2 vaults.
The Redemption Vault (RV)
RV is a single vault with two internal accounting buckets holding all assets earmarked for mPENDLE resolution: RV-A (claim pool) and RV-B (tender budget pool).
RV-B can only spend within its epoch cap. RV-A assets are never used for RV-B fills. All inflows are credited to RV-A by default.
Lane A distributions are senior. For each epoch, the Lane A payout amount is first reserved from RV-A. RV-B’s budget is then computed from the remaining eligible assets and current-epoch inflows. RV-B budgeting cannot reduce a Lane A payout amount once it has been announced for that epoch. Lane A payout amounts are announced at a fixed time each epoch (e.g., epoch start) and are based on RV-A assets at that time.
RV-B is funded only via the epoch budget carved out from (i) current-epoch inflows and (ii) eligible liquid assets, subject to the caps defined below.
There are two optional lanes:
Lane A: Scheduled Redemption (queue, pro-rata)
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You deposit mPENDLE into RV-A and receive claim shares. Claim shares represent a pro-rata claim on RV assets allocated to Lane A.
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Claim shares are minted 1:1 to deposited mPENDLE; this mechanism is intentionally market-neutral and does not attempt to enforce a peg. This design avoids discretionary pricing and keeps the process auditable.
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RV-A pays out over time at a published cadence (weekly), pro-rata to all claim holders.
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Default payout asset: PENDLE
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If RV holds sPENDLE, RV converts to PENDLE for payout using a transparent, published method:
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withdraw to PENDLE where possible, otherwise
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swap subject to a capped slippage limit (published) and documented execution venue(s).
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What you’re buying with Lane A: minimum slippage, maximum fairness, time risk.
Lane B: Instant Exit Tender (auction)
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You submit mPENDLE to RV-B for an epoch (weekly).
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RV-B uses a fixed budget (strict cap) to buy mPENDLE at a single clearing price via batch/Dutch auction.
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If oversubscribed, fills are pro-rata within that epoch.
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Lane B fills are batch-processed at one clearing price per epoch; no intra-epoch priority based on timing or gas.
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If Lane B demand exceeds the budget, the epoch is partially filled pro-rata and unfilled orders roll off (users may resubmit next epoch).
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Lane B is a weekly batch tender where sellers submit mPENDLE and a minimum acceptable price (in PENDLE). RV-B computes one clearing price and fills pro-rata up to budget. Settlement is PENDLE only.
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Offers are sorted by minimum acceptable price (lowest to highest) and filled until the budget is exhausted. The clearing price is the highest minimum price among filled offers. All filled sellers receive the clearing price in PENDLE.
What you’re buying with Lane B: speed, paid for via discount.
Funding sources
RV inflows come from two buckets, each with fixed split rules.
1) Legacy cashflows
Any Pendle fee share, bribes, incentives, and related revenues attributable to the legacy position (legacy cashflows).
Phase 1 routing
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100% of legacy cashflows route to the RV.
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100% of unlock principal routes to the RV.
Post-Phase 1 routing
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100% of unlock principal continues to route to the RV until the legacy stack is exhausted.
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Legacy cashflows follow the post-Phase 1 revenue split (not 100% to RV). The RV maintenance allocation may be used for limited tenders and settlement costs during this period.
2) New strategy fees
A defined share of strategy fees from sPENDLE vaults flows into the RV during Phase 1, capped at S% of strategy fees per epoch (recommended start: 25%) and subject to the Phase 1 stop condition.
Pressure testing the lanes
Lane A always works
It is a queue paying pro-rata from inflows. If inflows slow, time extends, but treatment stays equal.
Lane B cannot break the vault
Non-negotiables:
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Budget cap: Lane B can spend up to X% of RV liquid assets plus Y% of current-epoch inflows per epoch.
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Batch clearing price: one price per epoch, no first-come advantage.
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Pro-rata fill: oversubscription fills pro-rata, not by gas wars.
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Discount absorbs runs: if demand spikes, price clears lower and the vault remains solvent.
Governance token handling (PNP / vlPNP)
Keep it clean and avoid a forced merge at first.
Phase 1: Stabilize and fund the exit
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RV receives a fixed share of net protocol revenue until a target is reached.
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vlPNP still receives a share, but it is explicitly second to the RV funding schedule during Phase 1.
Phase 2: New steady state
Once the Phase 1 stop condition hits, revenue split shifts to the long-term model:
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vlPNP fee share and optional buyback policy, and
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ongoing treasury funding.
If the community later wants to merge tokens, do it as opt-in conversion.
Sequencing and stop conditions
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Phase 1 revenue routing stops when: RV has retired Z% of circulating mPENDLE or N months elapse, whichever occurs first.
- Circulating mPENDLE is measured as total supply minus irrecoverable/burned balances and contract-locked balances, using a published method.
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Lane B tender program stops at the same trigger unless governance renews it by vote.
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Lane A queue remains open until final legacy lock expiry + 12 months, after which the RV enters settlement.
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Principal routing does not stop: all PENDLE principal unlocked from legacy vePENDLE continues to route to the RV until the legacy stack is exhausted.
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After Lane B stops, RV may continue Lane B only for RV maintenance tenders funded by the 5% RV maintenance stream, subject to the same caps.
Reasonable starting parameters
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Epoch length: 7 days
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Lane A payout cadence: weekly, pro-rata
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Lane B cap: X = 10% of RV liquid assets per epoch plus Y = 50% of that epoch’s inflows
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Switching: users can move between lanes between epochs (48-hour cooldown)
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Ops and Safety Reserve: 5% of gross receipts
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Phase 1 RV allocation: 60% of net protocol revenue (after Ops and Safety Reserve) routed to the RV
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Strategy-fee cap to RV: S = 25% of strategy fees per epoch (Phase 1 only)
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Phase 1 stop condition: Z = 20% of circulating mPENDLE retired or N = 12 months elapse, whichever happens first
Post-Phase 1 revenue split
RV maintenance while Lane A is open
- 65% vlPNP, 20% treasury, 10% treasury growth and overhead, 5% RV maintenance (used only for settlement costs and limited tender support, not new strategy risk)
Settlement, closure, and late claims
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Lane A deposit window remains open until final legacy lock expiry + 12 months, after which the RV enters settlement and new Lane A deposits close.
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After closure, a 6-month late-claim window allows redemption at final NAV terms.
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After the late-claim window, remaining assets transfer to treasury (or safety fund) by rule.
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Final NAV terms are calculated as RV liquid assets plus realizable principal routed to RV, divided by outstanding Lane A claim shares at settlement start.
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Realizable principal = PENDLE already held by RV plus PENDLE that becomes withdrawable within 90 days of settlement start.
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Principal that unlocks after settlement start continues to fund (i) weekly Lane A distributions through the end of the late-claim window and then (ii) transfers per the disposition rule.
Transparency
Publish on a dashboard:
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RV NAV
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Inflows/outflows by source (legacy cashflows, principal unlocks, strategy fees)
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RV liquid-assets balance
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Clearing price and fill rate each epoch (Lane B)
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Claim share supply and retired mPENDLE totals
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Legacy lock ladder (expiries and a weighted average remaining time measure)
Let’s address the logic, not just the emotions.
1. The “I never farmed PNP” Argument is Irrelevant You claim you didn’t farm PNP, but that doesn’t change the protocol’s accounting. When PENDLE was locked, PNP was minted.
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If you locked it yourself: You received PNP. If you sold it, you already cashed out that portion of the value.
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If you bought mPENDLE on the secondary market: You likely bought it at a discount compared to PENDLE. That discount exists precisely because you were buying the yield component (mPENDLE) without the governance component (PNP). You cannot demand the benefits of a “Full PENDLE” holder when you only hold the “Yield” half of the asset structure.
2. Correcting the “PNP pays nothing” Fallacy You stated: “PNP holders save value at no cost to you, and all cost to mPendle holders.” This is factually incorrect. Under the current proposal, protocol revenue (which belongs to PNP holders) is being diverted to the Redemption Vault to buy back mPENDLE.
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PNP holders are giving up their cash flow to subsidize mPENDLE exits.
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If PNP holders were truly selfish, they would keep 100% of the revenue and leave mPENDLE with zero liquidity. The fact that PNP revenue is being used to build an exit path for mPENDLE proves that PNP holders are the ones paying for this restructuring.
3. Value Attribution You argue that “Value is generated through the locked vePendle.” Correct. And that value is split:
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Yield (Swap fees/rewards): Goes to mPENDLE.
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Governance (Bribes/Voting): Goes to PNP. You have been receiving the yield. Now you want the Governance value (the Principal redemption) too, without returning the PNP value. That creates a breakdown in the equation:
vePENDLE = mPENDLE + PNP. You cannot strip the asset of its yield rights, sell off its governance rights, and then demand the protocol make you whole on the principal.
2 Likes
After reviewing the proposal, I have identified four critical flaws that threaten the protocol’s viability and fairness:
1. Financial Unsustainability (PRT + Redemption = Collapse) The protocol is already obligated to pay 20% of revenue towards PRT debt. Adding an aggressive redemption mechanism on top of this creates a mathematical deadlock. The protocol cannot sustain operations, repay debt, and fund heavy outflows simultaneously. This structure guarantees a cash flow crisis that will likely halt protocol operations.
2. Structural Conflict of Interest This proposal splits the community into opposing camps. It creates a “Player vs. Player” scenario where mPENDLE holders are incentivized to drain assets to exit, while PNP holders need to preserve assets to rebuild. Instead of aligning interests for recovery, this mechanism institutionalizes internal conflict and gridlock.
3. Unfair Exploitation of PNP Holders Given the existing debt burden, this plan places the entire weight of recovery on PNP holders. By prioritizing maximum liquidity for exits, the proposal strips PNP of its yield and value capture. It asks PNP holders to bear 100% of the risk while receiving virtually 0% of the rewards, essentially liquidating the governance token to subsidize exits.
4. Excessive Complexity and Security Risk “Complexity is the enemy of security.” The proposed system (dual lanes, dynamic budgets, split accounting) is dangerously over-engineered. Introducing such experimental and intricate logic significantly increases the attack surface for smart contract bugs. At this critical stage, we cannot afford to deploy a high-risk system that could lead to another security incident.
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Before attempting to arbitrage or steal from Penpie, you should at least read the whitepaper and all previous PIP decisions.
ie. mPENDLE has never represented the vePENDLE position.
1vependle = mpendle+pnp
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yes, you never get PNP because you buy mpendle from market, like when 1pendle = 2mpendle or so，while pretending to be one who converted from the original (pendle to mpendle +pnp ) vault,
Stop trying to arbitage the protocol.
tks
As a holder of both vlPNP and mPENDLE, I fully understand the desire of mPENDLE holders for a clear redemption path and governance rights. To ensure no party is unfairly treated, we have meticulously audited the protocol’s assets and historical context.
Our guiding principle is the formula: vePENDLE = PNP + mPENDLE. Acknowledging that both assets are essential components of the underlying value, we established an equal baseline allocation of 47.5% for each side (after a 5% Ecosystem Reserve).
However, the calculation results in a higher conversion rate for individual PNP tokens compared to mPENDLE. This is not due to bias, but rather strictly follows mathematical logic and historical asset ownership:
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Supply Disparity: The circulating supply of PNP is approximately 10 million, whereas mPENDLE is over 12 million. Since the total allocation pool (47.5%) is equal for both groups, the lower supply of PNP naturally results in a higher allocation per token.
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Ownership of the 2.6M Treasury mPENDLE: This asset belongs to PNP holders by right. In previous PIP proposals, PNP holders voluntarily sacrificed their own yield share to maintain the mPENDLE PEG and ensure liquidity. This 2.6M mPENDLE was accumulated through that sacrifice; therefore, its value must be credited back to the PNP side.
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Treatment of the 2.2M Treasury PNP: We have handled the treasury’s PNP holdings to benefit the community:
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1.1M PNP is excluded from the PNP allocation pool entirely, preventing dilution for existing holders.
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The remaining 1.1M PNP is being transferred to mPENDLE holders.
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Conclusion: While the math shows a higher rate for PNP, please recognize the significant concession being made here: PNP holders are effectively donating 1.1M PNP from the treasury to mPENDLE holders. This is a deliberate gesture of goodwill intended to bridge the gap, compensate mPENDLE users, and resolve the conflict between our two groups once and for all.
To all mPENDLE holders insisting on a pure redemption path, we need to face the cold, hard math. The idea that you can simply “exit” 1:1 is a dangerous illusion that ignores the protocol’s underlying structure and debt obligations. Here is the breakdown of the actual cost you would face:
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The “Key” is Not Just mPENDLE According to the protocol’s fundamental peg, 1 vePENDLE is composed of 1 mPENDLE + 0.7837 PNP. You cannot redeem the underlying asset with mPENDLE alone; you are structurally required to bundle it with 0.7837 PNP to unlock the door.
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The 20% Debt (PRT) Haircut Even if you assemble the required bundle (1 mPENDLE + 0.7837 PNP), we still owe a 20% debt (PRT). This means your bundle will NOT get you 1 PENDLE. It will only return 0.8 PENDLE.
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You Are paying More to Get Less (Realized Loss) Let’s mark this to market prices ($1.28 PNP, $0.815 mPENDLE, $2.00 PENDLE):
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Cost to Redeem: $0.815 + (0.7837 * $1.28) ≈ $1.818 (The value you must submit).
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Value Received: 0.8 * $2.00 = $1.60 (The value you get back).
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Result: You are accepting an immediate realized loss of over 10% just to exit.
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The Hidden Cost: 1.53 mPENDLE for 1 PENDLE When we factor in the need to acquire PNP and the debt haircut, the effective exchange rate is disastrous. You would effectively need to burn the value equivalent of ~1.53 mPENDLE just to get 1 PENDLE back. This is a massive devaluation of your holdings.
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The Liquidity Death Spiral: A Market Depth Reality Check We must look at the hard data, not just theoretical prices. I ran a market simulation (see screenshot below) for buying just $100,000 worth of PNP. The result? A staggering -51.88% price impact.
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The Supply Crunch: Unlike mPENDLE, which is fully circulating (>12M), over 5 million PNP are permanently locked or non-circulating. The optimistic maximum floating supply of PNP is only ~5 million.
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The Impossible Math: There are 12M+ mPENDLE trying to exit through a door that requires PNP keys, but there are only ~5M PNP keys available.
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The Result: If mPENDLE holders rush to buy PNP for redemption, you won’t be paying the market price of $1.28. The slippage alone will eat half your capital instantly. The cost to redeem won’t be $1.818; it will skyrocket exponentially. You are not just paying a premium; you are fighting a liquidity squeeze that guarantees massive realized losses.
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Conclusion: Pushing for pure redemption under these conditions is mathematically suicidal. We are fighting for a solution that preserves value, not one that forces us to realize losses.
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