What You Need to Know About Penpie
Penpie Performance & Magpie Ecosystem
In this edition, we’re keeping you up to date on Magpie, and the yield and ve-tokenomics boosting ecosystem they have built.
Of the projects under the Magpie umbrella, Penpie stands out, accounting for ~35% of Pendle TVL.
Keep reading to learn what Penpie has to offer Pendle users…
Stay alert in the markets ⬇
What is Magpie?
Magpie was introduced as a yield and ve-tokenomics boosting protocol for Wombat exchange.
However, the protocol has been gaining traction for the sub-DAOs under the Magpie umbrella.
Since the launch of Magpie, the protocol has implemented the same model for 3 other projects:
Penpie for Pendle
Radpie for Radiant
& coming soon, Campie for Camelot DEX
Of the ~$80M in TVL, Penpie makes up ~$65M of this, or around 80% of total protocol TVL.
What is Penpie?
Penpie is a yield-boosting platform built on Pendle Finance.
It targets users who do not want to lock their tokens but still want boosted yields.
Penpie acquires and locks $PENDLE tokens for them, providing boosted rewards through its vePENDLE treasury.
The platform has $9 million in its $vePENDLE treasury and stands as the number one yield-boosting platform on Pendle Finance.
A comparison could be drawn between Penpie and Convex, a yield-boosting platform for Curve.
Penpie is part of the larger Magpie DAO ecosystem, which includes other yield-boosting platforms for the different protocols under the Magpie umbrella.
Penpie is one of the sub-DAOs under Magpie.
Penpie builds on Pendle because of its unique utility in the DeFi space.
Many users don’t want to lock their tokens for an extended period, which is a requirement on Pendle.
Penpie addresses this issue by offering boosted APYs, thus expanding Pendle’s user base.
Penpie doesn’t have any VCs or other kinds of investors; it’s a community-driven protocol with no team allocation for the $PNP token.
Penpie benefits from Pendle’s platform revenue, which they distribute to token holders.
Penpie locks the tokens they receive for the maximum possible time of two years, reducing $PENDLE’s circulating supply.
Penpie makes up about 35-36% of Pendle’s TVL, highlighting the mutually beneficial relationship.
This represents the highest ratio of underlying project TVL captured across any of the sub-DAOs in the Magpie ecosystem.
First introduced in May 2023, Penpie was the first sub-DAO under the Magpie name and has had the most time to accrue TVL and prominence among its underlying project.
Comparing $PENDLE & $mPENDLE
$mPENDLE serves as a liquid wrapper for $vePENDLE tokens, which are otherwise locked.
The protocol perpetually locks these tokens for two years, thereby lowering the circulating supply of $PENDLE tokens.
The rewards accrued from locking $PENDLE tokens go to $mPENDLE holders.
However, the percentages of how these rewards are distributed between $mPENDLE holders, Protocol Revenue, and LP boosting are not specified.
On Pendle Finance, locking your $PENDLE tokens gives you swap fee revenues and voting power, without other types of revenue.
However, converting $PENDLE tokens to $mPENDLE at Penpie provides more flexibility and additional revenues.
$mPENDLE holders will also have the flexibility to trade their $mPENDLE tokens back to $PENDLE tokens on the Wombat exchange.
The current peg amount for $mPENDLE to $PENDLE is around 95%, which Lew views as optimal for $PENDLE holders.
A smart converter, an $mPENDLE pool, and a stability Vault are used to maintain this peg.
The smart converter was developed around two months ago, with the $mPENDLE pool being newer.
SY revenues generated on the $mPENDLE pool will contribute to bringing the peg closer to a one-on-one ratio if it’s below 95%.
If the peg is above 95%, then the SY rewards will be converted to $mPENDLE to increase the $vePENDLE treasury.
Comparing $PNP & $PENDLE
The platform takes 20% of the boosted APYs as revenue, of which 12% goes to $mPENDLE holders and 8% to $PNP holders, $PNP being the native governance token of the Penpie sub-DAO.
In the future, 3% of liquidity provider emissions will be reserved for $PNP buybacks.
Holding $PNP tokens and locking them in as $vlPNP gives you proportional voting power on Pendle Finance. The voting power is distributed according to the amount of $vePENDLE held.
By locking up your $PNP, one can gain revenue share and other benefits, creating a potentially infinite loop of rewards.
Locking $PNP for 60 days is a major benefit compared to a two-year lock-in period for $PENDLE, for those who value flexibility.
Following Pendle receiving an OP grant, the Penpie team has stated that they will apply for one of their own.
Increased liquidity on Optimism should encourage more pools in Pendle.
Important Links
Become a Premium member to unlock all our research & reports including access to our members-only discord server
Join thousands of sharp crypto investors & traders by becoming a Premium Member & gain an edge in the markets. For just $33.25/month you’ll get:
*NEW* Launch Alpha - Weekly report highlighting new projects
*NEW* The Trace - Real-time onchain alerts for smart money movements
*NEW* Airdrop Guides - Reports on airdrop opportunities
Access to Members Only Discord server
Premium access to the entire Revelo Intel platform
Analyst Insights reports - actionable trade ideas
Project Snapshots - Monthly protocol-specific performance reports
Project Breakdowns & Timelines - Deep dive 50+ page protocol-specific reports
Notes - Summaries of your favorite podcasts & AMA’s
penpieeeeeeeeeeeee