From Manual Voting to Mathematical Meritocracy
Manual governance voting for $PENDLE emissions is dead. Pendle just activated the Algorithmic Incentive Model (AIM), a regime change, not a tweak.
The kicker: 30% emission cuts + higher LP profitability.
Here's how.
—
► The Problem: Capital Inefficiency
Under legacy voting system, 50% of emissions funded the 10 least profitable pools. Liquidity sat in zombie pools, earning rewards without generating volume or fees.
AIM eliminate this by forcing liquidity to justify its existence through measurable activity.
—
► The AIM Engine: Two-Phase Lifecycle
❶ Phase 1: Bootstrapping (t ≤ 21 days)
→ TVL-weighted rewards to overcome cold-start friction
→ New pools earn high emissions just for existing
❷ Phase 2: Maturity (t > 21 days)
→ Training wheels off. Emissions cap at 4x historical swap fees
→ Zombie pools lose rewards. High-volume pools capture the majority
→ No time limit on fee-based rewards. A Day 100 pool earning $7.5k/week is fine if volume justifies it
—
► Co-Incentives: The Multiplier
External protocols can still influence liquidity via direct incentives. For every $1 they contribute, Pendle adds up to $0.40 in PENDLE tokens, a 1.4x multiplier with 9,000 PENDLE allocation weekly.
—
► Why This Crushes for LPs
✓ No ve-Boost requirement. Holding $vePENDLE doesn't boost yields anymore
✓ Higher real yield. 50% fewer wasted emissions = concentrated rewards in active pools
✓ Predictable. Fees, not politics, drive your returns
—
► What's Next?
Phase 2 integrates Limit Orders (45% of current volume, 90%+ for major pools). Backtesting suggests 130x efficiency gains.
The free ride for idle capital is over.
—
cc
- @tn_pendle
- @PendleIntern
