The yield-trading protocol Pendle reported a 43% increase in total value locked (TVL) during the third quarter, reaching $1.16 billion by September 30. This growth occurred despite a 58% reduction in PENDLE token incentives.
Real-world assets (RWA) served as the primary growth driver, accounting for 82% of the protocol's TVL by the end of the quarter. Tokenized dollars backed by RWAs grew by $395 million, finishing the period at $949 million.
The protocol increased its focus on token buybacks, repurchasing 3.2 tokens for every one distributed in incentives, compared to 1.6 in the second quarter. Pendle allocates 80% of retained fees to fund these buybacks.
Principal Tokens (PTs) saw increased adoption as collateral in DeFi, with usage doubling to approximately $497 million. This growth was supported by listings on Morpho and new integrations on Aave.
Despite the overall TVL growth, V2 revenue declined to $2 million due to lower trading fees. The protocol faces a significant maturity event in the fourth quarter, with $1.06 billion in assets set to mature by December 17.
