Evaluating Strategic Paths Forward

Penpie 3. Community Ideas
42

Thanks for the response. I agree Penpie originally separated economic rights (mPENDLE) and governance rights (PNP). The disagreement is not about that architecture, it’s about what governance is legitimately allowed to do to the economic token after an external regime change.

1) Separation of rights does not grant unlimited authority over depositor claims
Penpie’s own docs describe mPENDLE as a liquid representation of vePENDLE, with converted PENDLE locked to generate benefits for depositors. Under Pendle’s vePENDLE → sPENDLE transition, the underlying object has changed. Governance can decide future strategy, but that does not justify reclassifying or reallocating the legacy economic claim without holder consent or a clean opt out.

2) Historical PNP emissions are not retroactive consent
While PNP emissions were available to mPENDLE stakers, they were variable, time dependent incentives (early depositors received far more due to bootstrap programs), non-recourse, and never contractually pledged against mPENDLE principal. Using uneven past emissions to justify a restructuring today is ex-post redistribution, not alignment.

3) “We could have given you zero” is not a fairness standard
That argument reflects governance power, not economic consistency. The relevant question is whether the proposal preserves continuity of the mPENDLE economic claim. And if it does not, whether holders are given consent or an opt-out.

4) Once consent is addressed, economic details can be negotiated constructively
If mPENDLE holders are given a formal voice (or an enforceable opt-out), then discussions around token mergers, OSTR allocations, or fee structures can proceed in good faith. Without that, those discussions are inherently one sided. Before any binding vote that alters mPENDLE economics, please commit to one of the following:

(a) formal mPENDLE holder consent on proposals that redefine mPENDLE treatment, or

(b) a deterministic, non-overrideable opt-out / redemption path

2 Likes
43

1) This is not arbitrage, and it is not theft
Raising concerns about depositor consent and economic continuity is neither arbitrage nor an attempt to “steal” from Penpie. It is a legitimate governance discussion about how depositor-owned assets are treated under a materially changed external regime.

Personalizing the issue does not address the substance.

2) “mPENDLE has never represented vePENDLE” is incorrect as a practical matter
Penpie’s own documentation and product descriptions consistently framed mPENDLE as liquid exposure to vePENDLE staking economics, with deposited PENDLE converted and locked as vePENDLE to generate benefits.

The fact that Penpie internally decomposed 1 vePENDLE into “mPENDLE + PNP” does not negate that:

  • mPENDLE was the sole instrument carrying the economic yield stream, and
  • PNP was the governance / residual upside token.

That distinction matters. Governance tokens do not retroactively acquire seniority over the yield token simply because they were part of the original minting equation.

3) The decomposition formula does not imply governance recourse over principal
Stating “1 vePENDLE = mPENDLE + PNP” describes initial allocation mechanics, not a perpetual right for governance to reclaim or redefine the economic claim represented by mPENDLE.

PNP emissions were:

  • Incentives, not escrowed collateral
  • Non-recourse
  • Unevenly distributed over time

They cannot be used ex post as justification for reassigning depositor economics without consent.

4) The question remains unchanged
Regardless of how one labels the original decomposition, the current proposal:

  • Materially alters the economic treatment of mPENDLE
  • Is being decided solely by PNP holders
  • Provides no consent mechanism or non-overrideable opt-out

That is the issue under discussion.

If the position is that governance can always do this unilaterally, then the proposal should state that explicitly. If not, then depositor consent (or a binding exit right) must be part of the design.

5) Final clarification
This discussion is not about relitigating past PIPs. It is about whether a governance token can unilaterally redefine the economic claim of a yield token under an externally imposed regime change, without consent.

That principle is what’s at stake here.

1 Like
44

PRT is senior and comes off the top. The proposal defines net distributable revenue as revenue after Ops reserve, pass-throughs, and the PRT obligation, and only then applies the RV and vlPNP splits. There is no double-allocation.

Also, the design avoids “heavy outflows.” Lane A is a pro-rata runoff from whatever inflows exist, not a guaranteed 1:1 redemption on demand. Lane B is capped by a strict epoch budget and clears at a discount when demand spikes, so it cannot create insolvency.

The PvP dynamic already exists today as market dysfunction: mPENDLE trades at a discount while PNP tries to reprice future cashflows. Doing nothing keeps the conflict implicit and chaotic. This proposal makes it explicit, rule-bound, and capped: pro-rata Lane A, capped Lane B, published budgets, and a fixed sunset. That reduces the ability of any one group to “rush the exits” at the expense of others.

To further align incentives, add an automatic benefit to vlPNP tied to successful resolution:

  • If RV retires Z% ahead of schedule, post-Phase 1 vlPNP share increases by Δ for M epochs, or a capped buyback turns on, funded only from the post-Phase 1 split.

This does not liquidate PNP to subsidize exits. The strongest piece is principal routing: unlocked legacy principal routes 100% to RV because that principal is the underlying asset base that mPENDLE originally represented. The incremental revenue diversion is Phase 1 only, bounded by Z or N, and then the system reverts to a steady-state split where vlPNP retains ongoing economics.

To make this more clear the proposal could add:

  1. vlPNP floor in Phase 1: vlPNP receives at least F% of net distributable revenue during Phase 1.
  2. RV step-down: RV’s Phase 1 share steps down once RV liquid assets exceed X months of Lane A payouts (a coverage metric).

The complexity here is economic policy, not exotic contract engineering. The on-chain surface area can be kept small: a single vault, two internal balances, a weekly accounting function, and a capped batch tender module.

The highest-risk component is Lane B, which is optional and can be staged:

  1. Deploy Lane A first (runoff only). Gate Lane B behind audit and a separate governance activation.
  2. Use a timelock for parameter changes (X/Y/S/Z/N and split percentages).
  3. Run independent audits plus a bug bounty. Design an emergency pause on Lane B only (Lane A payouts continue).
45

The Hard Truth: Why PIP #22 is the Only Rational Path Forward (and why 1:1 Redemption is Economic Suicide)

I understand the frustration, but we need to look at the mathematical reality and the original design of Penpie, rather than emotional calls for liquidation. Here is why PIP #22 is the fair, ethical, and necessary solution, and why the demand for 1:1 mPENDLE redemption is fundamentally flawed.

1. The “1:1 Redemption” Myth: You Can’t Double-Dip The most common argument against this proposal is that mPENDLE should be redeemable for PENDLE 1:1. This ignores the history of how these assets were minted. When users originally deposited PENDLE, they didn’t just receive mPENDLE; they also received PNP incentives. According to the protocol’s production function, the value of 1 PENDLE was split: 1 PENDLE = 1 mPENDLE + 0.7837 PNP. PNP represents the governance and yield rights. If mPENDLE holders demand 100% of the underlying PENDLE back now, they are effectively asking to keep the historical rewards (PNP) they mined while also claiming the full principal. Unless redeemers return the PNP they earned, demanding a 1:1 exit is mathematically unfair.

2. Protecting the Treasury from Speculators On-chain reality shows that many current mPENDLE holders are not original depositors, but speculators who bought on the secondary market at a discount (trading around 0.5–0.6 PENDLE). Allowing 1:1 redemption would essentially drain the PNP holders’ equity (the Treasury) to subsidize speculators who bought in at a 40% discount. This would result in risk-free profit for arbitrageurs while destroying the long-term value for stakeholders who supported the protocol’s governance.

3. The Asset was Always “Locked” mPENDLE was designed as a “Perpetual Yield Certificate” for a locked asset (vePENDLE), not a demand deposit account. The Terms and Conditions clarify that assets are deposited into underlying protocols and carry inherent risks. Demanding instant liquidity violates the physical attribute of vePENDLE. The protocol is undergoing a strategic restructuring, not a bankruptcy liquidation.

4. OSTR: A Win-Win for Survival The PIP #22 proposal offers a conversion value of approximately 0.604 PENDLE for mPENDLE, which is actually higher than its recent secondary market trading price. By merging into OSTR, we preserve the Treasury’s ability to generate income (via sPENDLE) and maintain voting power. This ensures the protocol continues to create value, rather than breaking up the holdings and destroying the project for everyone.

Conclusion We face a choice between liquidation (which benefits arbitrageurs) and evolution (which benefits long-term stakeholders). Let’s be rational, reject the unreasonable demand for 1:1 redemption. :))

46

Because of the way Penpie set up the contracts, There ARE actually people (me included) that legitimately just got fleeced by locking up Pendle for mPendle, got mPendle 1:1 when the peg was already below 1, and got NO PNP at all.

I brought up this incredibly sloppy (or malicious!) handling of Pendle Rush rewards which completely screwed people for nothing if they deposited Pendle where the ‘fine print’ showed no rewards available, which was shrugged off, ‘too bad so sad’.

Given now that we are being told that the Pendle deposit earned PNP when it did not for the users, OR that it was bought at a discount, when it was not for these users, is just another slap in the face and loss of trust with the protocol. So people like me are the biggest losers of all here.

Of course, this could all be verified on-chain, and maybe there is a special case to be made for this particular subset of depositors, since the logic doesn’t apply at all to them. I suggest at least some consideration for these users is made as they did not receive any of the supposed value from PNP and the difference was just taken by the protocol.

2 Likes
47

@0xjo “Stop trying to arbitage the protocol.”

I have been into Penpie personally for 2 years & a half, few months after discovering Pendle.

The accusations some of making of mPendle holders just trying to arbitrage are baseless.
There are arbitragers, for sure.

Most of them though won’t comment on the forum - They will act based on the actual voted proposal.

I have found no whitepaper - Would love it if you could share the link of it.

… About 1:1 Redemption

Most everyone knows 1:1 redemption won’t happen, at least not now, where mPendle takes everything, and PNP takes nothing.

Discussing it, frankly is pointless, it won’t be pushed forward -
Anyone that want 1:1 should probably look at legal solutions against Penpie.

My personal view of this is that most holders of OSTR will push for redemption in 2 years - but that’s a different story.

As of now, most mPendle holders just feel fleeced in the deal, as they :

  1. Can’t even vote on their future.
  2. A good amount of us locked Pendle to mPendle at full value (I did, just like RCustardo, on my first staking, before realizing that buying on the market was the better option, even with PNP rewards, which I then didn’t get) - Going from peg of 1 to 0.60 is a 40% drawdown, but would require 33% APR for 2 years to just breakeven on the peg.
    Which means, a lot of us, who staked at 1, or above 0.6, to various extent, who supported & trusted the protocol have lost money or barely broke even in the most optimistic cases after YEARS of holding mPendle.
    And that’s for those of us who are still here, and went through the mPendle peg going down to 0.25 during the PRT 2024 September hack, without selling.

We’re not even talking about profits - Just breaking even.

  1. The ratio of allocation between PNP & mPendle thus feel inappropriate to anyone who’s been in mPendle for years.
    If the concern is that some people will arbitrage this - It could be an option to give a bonus allocation to the people that have held mPendle for an extended period.

It frankly wouldn’t be too hard to choose a timeframe, look at the amount & value of early mPendle holders still present and compensate their support than pursue the current proposal in its actual form, which feels more like a takeover of our mPendle, trust & commitment.

… If obviously it’s not most current holders.

Once again - I don’t ask for 1:1 redemption.
Anyone that want 1:1 redemption will have better chances suing Pendle in Singapore.

I ask for a recognition of mPendle early supporters, who stuck through despite everything.
Of course, giving it would be SILLY to give a 0.7 or 0.8 peg to people who bought at 0.25.

But for those that entered and held for years…
Some recognition of our support & contribution would honestly go a long way towards making us content with moving forward with the situation.

I hope we’ll be able to find some common ground here.

1 Like
48

While I acknowledge the insecurity felt by mPENDLE holders, it is crucial to remember that PNP holders are not a monolith but a collection of participants who have adhered to the protocol’s rules. We must plan within the framework of existing rules, utilizing a neutral perspective. Under the current absolute conditions, mPENDLE is structurally disadvantaged and would require extracting excess yield or massive subsidies from PNP to achieve full redemption—a scenario we cannot accept.

Here is my response to your points:

1. The Absolute Sovereignty and Continuity of Governance mPENDLE is not, and never has been, the governance token of this protocol. This has been the foundational rule from day one, and it remains true regardless of any “regime change.” Just as sPENDLE inherits the rights and obligations of vePENDLE in the transition, PNP—as the sole governance token—inherits the governance authority over these assets. Arguing that governance rights are voided simply because the underlying asset format has changed is logically flawed and inconsistent with standard DeFi governance principles.

2. Market Pricing Responsibility and the Reality of PIP-12 Subsidies Investors in the secondary market are responsible for pricing in the rules of the game, including governance structures. You argue about “unfair distribution,” but this is largely the result of market arbitrageurs, not protocol malice. The protocol is not obligated to dilute its remaining assets to bail out users who were arbitraged by others. In fact, if we look at historical fairness, PNP holders have been the ones making concessions. Since PIP-12, PNP holders voluntarily sacrificed a significant portion of their yield rights to subsidize mPENDLE’s peg and liquidity. That was the real unequal distribution. Despite this history of subsidizing mPENDLE at our own expense, we are still pushing for Proposal to resolve the issue through a fair merger, which demonstrates our commitment to cooperation.

3. Not a Threat, But a Fiduciary Reality You interpret the statement “we could have given zero” as a threat, but it is a description of the harsh economic reality. During these discussions, a significant number of PNP holders have voiced that mPENDLE has already extracted too much yield via PNP subsidies under the old rules. In this extreme scenario, continuing to subsidize mPENDLE exits at the expense of PNP equity is unjustifiable. Ending these subsidies is not exploitation; it is a return to sound financial logic.

4. Lack of Constructive Engagement vs. The Math of Redemption You repeatedly label the proposal as “unfair” and demand “formal consent rights,” yet I have seen no detailed feedback from you regarding the proposal’s mechanics or parameters. Demanding veto power without contributing to the solution raises doubts about your willingness to cooperate. Furthermore, as I have demonstrated in other comments with detailed calculations, pushing for a pure “exit/redemption” path is mathematically impossible. It would trigger a liquidity death spiral, forcing mPENDLE holders into massive realized losses. Demanding a redemption path that leads to financial ruin, while ignoring the math, is the definition of irresponsibility toward mPENDLE holders.

49

I appreciate the comprehensive economic framework you have presented. Amidst the array of parameters, I can recognize the meticulous planning in Proposal regarding the “separation of rights” and “user choice.” However, it is precisely this high level of complexity that makes it difficult to evaluate the proposal’s actual efficacy. Even assuming the mechanism is theoretically sound, I see several critical issues in practical execution:

1. The “Black Box” of Parameters and Lengthy Validation Cycles Future governance will be burdened with setting numerous sensitive parameters (e.g., Z%, N months, various caps). From the current proposal, it is opaque how different parameter inputs will impact the broader economic system. If governance is forced to rely on a “trial and error” approach, the validation period for this scheme will be dangerously long. Without concrete data simulations, it is hard to be confident that all parties’ interests are truly protected.

2. Prohibitive Explanation Costs If someone like myself, who is relatively well-versed in the protocol’s mechanics, requires significant time to parse and understand this proposal, it is clearly beyond the grasp of the average investor. A mechanism with such a high “explanation cost” is detrimental to the protocol, as the market rarely trusts what it cannot understand. This information asymmetry will hinder the formation of broad community consensus.

3. Economic Security Risks (Game-Theoretic Exploits) You mentioned that the complexity lies in economic policy rather than the contract code, but my definition of security is broader. The more complex the rules and dual-lane mechanisms are, the higher the risk of unforeseen “economic loopholes.” My concern is not just smart contract bugs, but sophisticated arbitrageurs identifying gaps between Lane A and Lane B rules to extract outsized value from the protocol. Such value leakage would come at the expense of passive holders and is certainly not what investors want to see.

Conclusion: While I thank you for the active and detailed proposal, given the execution risks and uncertainties outlined above, I strongly advocate for returning to a simpler, more direct implementation to achieve our restructuring goals.

50

I fully understand your anger and must acknowledge that the situation you described points to a failure in the protocol’s early UI guidance or incentive design. Allowing users to mint 1:1 when the peg was already broken, without sufficient warning or compensation, has indeed placed you in the worst possible position. It is painful, and your frustration is valid.

However, regarding your request for a “special case” verification, we need to have a hard conversation about the operational reality:

  1. The Challenge of Fungibility On-chain, the mPENDLE you hold is contractually identical (fungible) to mPENDLE bought at a discount on the secondary market. Once tokens enter a wallet or are transferred, it becomes nearly impossible for the protocol to trace the “historical cost” of each specific token. implementing a “forensic retroactive refund” for a specific subset of depositors opens a Pandora’s box: Where do we draw the line? How do we handle tokens that were moved? This would mire governance in endless auditing disputes.

  2. The Current Proposal Is Your Best Safety Net Precisely because we know users like you hold no PNP, a “Redemption Mechanism” (which requires bundling PNP to exit) would be disastrous for you. You would be forced to buy PNP at a premium, inflicting secondary damage. The current merger plan is designed to mitigate this. Please note that the plan involves donating 1.1 million PNP from the treasury to subsidize the entire mPENDLE pool. This means that even though you missed the initial emissions, through this merger, you will effectively “share” in this subsidy provided by the treasury and PNP holders.

  3. Maximizing Recovery Value is the Only Path While we cannot achieve a perfect retroactive refund, the current plan aims to maximize the asset value for you by boosting the overall mPENDLE conversion rate (including the aforementioned PNP subsidy). This is the most pragmatic approach to aid aggrieved users without breaking the fungibility of the token standard.

We cannot undo the flawed mechanics of the past, but we can choose the exit path that is most favorable to “PNP-less mPENDLE holders.” A merger that includes a subsidy is objectively superior to a redemption model that requires you to supply PNP you do not have.

51

Sure. ,if you agree all of the white papers and pips are the base of the conversation. Then This whole discussion finally makes some sense.

Let me Show you the history:

PIP 1

During the initial mPendle Rush campaign, the system was exposed to malicious arbitrage activities.

To protect native ecosystem users, we introduced the SV pool, and mPendle participants are now required to lock their tokens for a certain period of time to join the Rush.

At the same time, 20% of the Pendle rewards originally allocated to mPendle were redirected to the SV pool.

PIP 2

We enabled LPs on the Ethereum network to participate, in order to attract more users to assist with reward harvesting,

thereby increasing LP deposits and overall liquidity.

PIP 3

Based on the mechanism introduced in PIP 1, we increased the reward allocation to the SV pool

from 20% to 40%.

PIP 4

To prevent excessive inflation and dilution of PNP, which could lead to a price collapse,

we decided to reduce the emission rate of PNP.

PIP 5

Due to continuous arbitrage and selling pressure from mPendle users,

the price of PNP kept declining and became difficult to control.

As a result, we decided to use all vePendle rewards from that period to buy back PNP,

in order to stabilize the token price.

PIP 6

We increased the fee for the LP boost mechanism.

The additional portion of the fees will be allocated to the treasury as protocol reserves.

PIP 7

Based on PIP 1 and PIP 3, we changed the reward distribution mechanism.

Instead of allocating a fixed 40% to the SV pool and the remaining portion to the mPendle regular pool,

rewards are now distributed proportionally according to the TVL of both pools.

PIP 8

To prevent continued sell pressure on PNP,

we decided to stop liquidity incentives.

PIP 9

To further mitigate selling pressure on PNP,

we reduced the PNP emissions for mPendle on Ethereum, BSC, and Optimism.

PIP 10

Due to the downward deviation of the mPendle peg,

we increased the LP boost fee by an additional 2%, which will be allocated to the treasury.

At the same time, 50% of the PNP vote fees will be used to buy back mP and permanently burn it,

in order to ensure the long-term sustainability of the protocol.

In addition, the team has chosen to forgo part of the LP boost revenue,

redirecting it to support the mP price and help maintain market stability.

PIP 11

We changed 50% of the rewards allocated to PNP from WETH to PNP,

thereby strengthening PNP liquidity.

PIP 12

In response to feedback from mP users regarding insufficient liquidity,

we decided to redirect the 50% portion originally used for burning in PIP 10

to enhance mP liquidity instead.

PIP 13

As the selling pressure on PNP remained severe,

we continued to further reduce PNP emissions.

PIP 14

The ENA airdrop rewards originally belonging to vePendle

were reallocated by PNP to support and strengthen mPendle liquidity.

PIP 15

After the Pendle hack incident, the protocol faced an unprecedented crisis.

PNP holders took on significant risks to buy high-risk PNP at the bottom,

helping resolve governance issues and at the same time rescuing the mPendle peg.

PIP 16

mP users argued that liquidity had become too deep,

which slowed down the price recovery of mP.

As a result, PIP 12 was modified: instead of adding liquidity,

the mechanism was changed to buy back mPendle directly into the treasury wallet.

Previously, Base chain rewards were fully used to buy back PNP;

this was adjusted so that a portion is now redirected to buy back mPendle.

PIP 17

All cross-chain resources were consolidated onto Arbitrum,

and the multi-chain expansion strategy was cancelled.

The treasury was authorized to stake mPendle to accelerate mPendle recovery.

PIP 18

The portion originally allocated in PIP 10 to support mPendle price

was reverted to the team for operational funding.

A 5% bribery fee is now charged for team operations.

At the same time, the SV pool was removed and PNP emission reduction was cancelled.

PIP 19

After Pendle changed its emission rules,

the bribery business was significantly reduced.

To prevent a sharp decline in Penpie’s overall revenue,

we decided to allocate 80% of voting rewards to vlPNP.

On Base, a large proportion of rewards is used for buying back mP.

PIP 20 / 21

Identical proposals were passed to consolidate vlPNP onto Arbitrum.

⸻

Summary Statement：

Looking at the entire proposal trajectory,

it is clear that mPendle has consistently been the source of selling pressure,

while PNP holders have borne almost all the risks to subsidize mPendle.

Originally, all vePendle rewards belonged to PNP holders.

Have you noticed how much PNP has sacrificed for mP along the way?

Originally, all vePendle rewards belonged to PNP.

Have you really not realized how favorable PNP has been to mP throughout this entire process?

Even up to today, PNP still maintains strong goodwill toward mP.

If you intend to use public opinion to force unilateral arbitrage or even expropriation,

and if what you want is a confrontation of power…

52

First and foremost, I want to express my deepest respect for you. Users like you, who have been here since the early days, stuck through the hack, and held through the de-pegging, are the true foundation of this protocol. It is absolutely wrong to label all mPENDLE holders as “arbitrageurs.” I fully agree that you have suffered losses due to your trust in the protocol, and that is an undeniable fact.

Regarding your suggestion for a “Bonus Allocation for Long-Term Holders,” while it is emotionally and morally justified, we face insurmountable obstacles in technical execution and governance:

1. The Deadlock of Fungibility At the smart contract level, the mPENDLE you minted two years ago is an ERC-20 token identical to one bought on the market yesterday. Once tokens are moved (e.g., wallet transfers, LPing, or depositing into third-party protocols), tracing the “holding duration” of each specific token becomes an auditing nightmare. Attempting to draw an artificial “loyalty line” would lead to endless disputes over criteria and would stall governance indefinitely. This delay would ultimately hurt everyone who wants to move forward.

2. The “Implicit Compensation” in the Current Plan is For You While we cannot technically filter for “long-term holders,” the recognition you seek is actually embedded in the current merger proposal. Please note that the protocol is designating 1.1 million PNP and other assets from the treasury to subsidize the mPENDLE conversion pool. These assets rightfully belong to PNP holders, but we have chosen to release them to boost the overall conversion rate for mPENDLE. This means that while we cannot exclude arbitrageurs, we are “expanding the pie” for mPENDLE to ensure that long-term holders like you receive a conversion rate better than the raw market value. This concession from the treasury is the most significant compensation the protocol can offer to all mPENDLE holders, including you.

3. Merging is the Only Way to Stop the Bleeding You are correct; 1:1 redemption is impossible. For users who entered at a high cost like yourself, continuing to litigate past losses will only result in further asset depreciation. The only path to breaking even or profiting in the coming years is to pass the merger quickly, converting your mPENDLE into OSTR—a token with governance rights and yield-generating capability—so the protocol can start earning revenue again.

We cannot undo the price crashes of the past, but in this new proposal, we have done our utmost to tilt treasury resources toward the mPENDLE side. We hope this gesture is seen as a tangible response to your long-term support.

53

Uhhhhhh - If that’s true, why would anyone convert Pendle to mPendle ?
Why anyone, in your opinion (and not AI), had any reason to convert to mPendle, since according to you, you frame mPendle conversion as a donation of Pendle from mPendle to PNP holders, for no guarantee, no yield, no redemption in sunsetting of the protocol.

So mPendle users did donations ?

It seems you have things twisted.

It would be appreciated as well if you could write your own thoughts, than feed our messages to ChatGPT / AI

1 Like
54

Just like for 0xjo, it would be nice if you could stop using AI to write & think, & write your own thoughts.
Using it for translation is fine, but making a logical justification based on AI that you don’t beleive in, but write just as a way to “win” serves no purpose to the conversation.

”**Bonus Allocation for Long-Term Holders”
”**we face insurmountable obstacles in technical execution” - No, this is actually very simple to do.

The Deadlock of Fungibility
That’s irrelevant to the conversation we’re having, since I asked specifically to move past 1:1 redemption.

”we cannot technically filter for “long-term holders”
Yes, this is possible ?
Look at first interaction of mPendle address with Penpie mPendle staking contract.
And there you go, that’s done.

”Attempting to draw an artificial “loyalty line” would lead to endless disputes over criteria”
Please stop using AI.
That’s obviously not an issue that there are disputes, as mPendle holders are actually already displeased with the current proposal - Yet their discontent won’t do anything for the proposal, since apparently it will be unilaterally enforced by people who mostly own PNP and not mPendle.

”This concession from the treasury is the most significant compensation the protocol can offer to all mPENDLE holders”

  1. How do you know ? Are you part of the team to know ? On which basis ?
  2. If true, why are we even discussing ? Pass the proposal, and stop pretending there is even a conversation, or seemingly a governance debate happening.
  3. Your framing positions mPendle holders as value extractors, when once again, that’s far from being true, especially for the long term holders.

“Merging is the Only Way to Stop the Bleeding”
I actually disagree.
Merging, is good as it aligns incentives of PNP & mPendle.
Frankly, there probably shouldn’t have been 2 tokens from the beginning.
But claiming that the merger is good for mPendle holders is false, since a merger is them giving the sole legal claim, if redemptions were to ever happen.
What I believed PNP is trying to do, is merge so in 2 years, PNP holders can ask for redemption and exit with a share of the originally locked vePendle.

The ones who lost their revenue, currently, is PNP holders, as voting & bribes are disappearing.
Not mPendle holders.
Yet mPendle holders are treated unfairly, with no voting rights on a core decision affecting them.

____

Anyway - Can we make the current deal planned for mPendle, better for long term holders ?
That’s my only question.
Please no AI answer asking it why it’s impossible.

Is this something PNP voters could conceive YES or NO ?

3 Likes
55

We seem to be talking past each other.

I’m not arguing that mPENDLE is or ever was a gov token. I accept that PNP governs the protocol. What I and others here are questioning is whether governance authority automatically extends to redefining the economic claim of mPENDLE under a materially changed setup, without any form of holder consent or opt out.

On market pricing and secondary buyers: yes, markets price governance risk. But that doesn’t mean anything goes. There’s a difference between accepting price volatility and accepting that governance can later consolidate ownership of an underlying depositor asset. The fact that some people bought mPENDLE at a discount doesn’t mean they consented to a future forced merger or loss of claim.

On subsidies and PIP-12: I don’t dispute that PNP holders made concessions in the past to support the peg and liquidity. But those subsidies don’t justify future restructuring that permanently changes mPENDLE’s claim. Those were voluntary economic choices at the time, not a lien on mPENDLE holders going forward.

Where we also diverge is on framing. I never said “give mPENDLE full redemption at any cost” or “bail out losses” or “PNP holders should endlessly subsidize exits.” What I’m trying to convey is that once a proposal crosses the line into redefining mPENDLE’s long term economic treatment, process matters just as much as math.

Right now mPENDLE holders are locked, have no vote, and are being asked to accept a merger on the basis that alternatives are “mathematically impossible.” Without some form of consent or opt-out option, this isn’t cooperation, it’s acceptance by default.

56

Let’s also keep in mind that PNP holders didn’t accept PIP-12 out of goodness of heart, but the reason why peg needed to be increased is to allow Penpie to increase the quantity of locked vePendle to increase revenue for PNP.

This wasn’t an altruistic decision, as it’s kind of implied to have had been.

PS : Please no AI answers

1 Like
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The PIP #22 Penpie DAT Adjustment Plan It’s a classic corporate “bail-in” strategy:
Liabilities (mPENDLE) are converted into low-value shares (OSTR).
Real assets (PENDLE/ETH) are used to provide liquidity for those new shares and benefit the founders and PNP holders.
In summary: You are exchanging a solid asset (PENDLE) for a promise of future value in a protocol that has already demonstrated that, when things go wrong, it prioritizes the survival of its governance token over the integrity of its users’ deposits. It is, effectively, a blatant extraction of value.

The mission of the PenPie protocol was to keep the peg as close as possible to the value of the underlying asset. Those implementing the proposal know that OSTR won’t work in the long run because it lacks confidence; its only function is to provide quick liquidity before entering a death spiral. So they’re not doing it for the project; they’re doing it to bail themselves out with depositors’ funds. The fairest solution would be 1:1 redemption and treasury assets and rewards for PNPs. Another fair, but less fair, option would be 1:1 redemption with a 5-10% tax allocated to PNP treasury.
The most realistic way for the protocol to continue would be through redemption and conversion to a Wrapped Stake Pendle protocol because it would maintain confidence. The rhetoric of governance, arbitrage, perpetual funds (the social contract is broken), etc., are excuses to appropriate depositors’ funds. PNP holders will be the big winners if it’s implemented. In legal terms, when a manager goes bankrupt, the shareholders would be the first to assume the debt, followed by the creditors, not the other way around. This is because it could constitute various offenses such as misappropriation or breach of trust, with liabilities extending to the team, the foundation, and even the voters due to collective and individual liability according to European laws that are applicable to Defi that in other places it were not very different. This cannot be presented as fair and ethical, is a proposal that violates the law itself.

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I would take it this way:

If time goes back to said 3 month ago and someone propose this to simplify the penpie governence structure, would we think this is something fair?

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Your argument is fundamentally flawed from the outset. To have a productive discussion, we must address the actual mechanics of the protocol rather than mischaracterizing it as a “bail-in.”

1. Yield Derivative vs. Demand Deposit The underlying assets held by Penpie are vePENDLE, which are programmatically locked. The core tenet of ve-tokenomics is the sacrifice of liquidity in exchange for enhanced yield. Since its inception, mPENDLE was designed as a “Perpetual Yield Certificate,” not a “demand deposit.”

2. The Governance Rights “Arbitrage” Let’s be clear about the history: during the initial conversion (e.g., the Rush program), users received a package of mPENDLE (yield exposure) and PNP (governance rights). Many participants chose to monetize their PNP immediately, effectively selling their governance power for profit. To now demand unilateral control or 1:1 exit—after having already cashed out the governance tokens meant to manage these risks—is not a “fairness” argument; it is governance extortion. You cannot sell your seat at the table and then demand to dictate the menu for free.

3. Historical Subsidies from PNP to mPENDLE You claim “value extraction,” yet you ignore that throughout Penpie’s operation, PNP holders have consistently funneled massive amounts of protocol revenue to subsidize mPENDLE yields. If you lack a clear picture of these flows, I strongly suggest you read through the entire history of the PIPs (Penpie Improvement Proposals). You will find that the “social contract” has been heavily tilted in favor of mPENDLE holders at the expense of PNP value capture for a long time.

Conclusion Demanding an impossible 1:1 redemption is not a viable solution; it is a refusal to acknowledge the reality and history of mpendle and pnp. TOTALLY WRONG!!!

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Again, some of us never even got any PNP after providing Pendle to the protocol, just 1:1 Pendle:mPendle. Where did that PNP go? Who capitalized on that? Any redistribution must net out realized incentives actually credited to each deposit, not hypothetical or average incentives. This data for every deposit is already available to review.

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lol there must be rare case, or otherwise who is willing to convert 1:1 without rewards? You cant expect any compensation or adjustment due to this, just for a few users ? I bet you must joining the rush event in a very last minute…or second.