Summary
Ketju does not approve Pendle V2 principal tokens (PT), yield tokens (YT) or LP positions: each market adds Pendle's contracts on top of another protocol's token, so every market carries its own risks and needs constant specialist monitoring. We judged each use separately. Pendle's core contracts are audited, and we found no defect in them. Pendle is a permissionless derivatives layer. It wraps another protocol's yield-bearing token as SY, splits it into principal (PT) and future yield (YT), and trades both through PT/SY pools for each maturity. A PT buyer buys a discounted claim on a named accounting asset at a named maturity and keeps the underlying protocol, wrapper, oracle, liquidity and asset risks. A YT buyer takes leveraged exposure to future yield and points, and the token falls to zero at expiry. An LP holds both sides plus fee, incentive and curve risk. Pendle V2 settled $3.8B of positions at its June 2024 maturity. In the 2024 Penpie exploit, a malicious permissionless SY harmed a protocol built on Pendle even though nobody breached Pendle's core contracts.
Review triggers
- Ketju will review Pendle again only for one named PT, YT or LP market and maturity; no approval carries across PT, YT and LP or to future markets
- The exact accounting asset, SY adapter, underlying protocol, bridge, oracle, owner, admin, guardian, timelock and deployed code all map to current primary sources and audits
- For PT, the proposed-size redemption at maturity is executable and a sale before maturity costs under 50 basis points after a 200-basis-point implied-yield shock
- For YT, return stays positive after assigning zero value to points and after a 50% decline in realized underlying yield
- For LP, the proposed-size withdrawal costs under 50 basis points and the return stays acceptable with incentives removed and the implied-yield curve moved outside its trailing-30-day range
Facts
- Verdict
- Not approved
- Type
- Liquidity pool
- Chains examined
- Ethereum, Arbitrum
- Reviewed
- Last confirmed