The Pendle ecosystem welcomes new momentum, the Interest Rate swap track enters a new era.

After both TVL and coin price have achieved a tenfold increase, the flywheel growth of the Pendle ecosystem is about to start. As a token that adopts ve-tokenomics mechanism, Pendle has long lacked a project similar to Convex to fully realize its potential. Equilibria has emerged to fill this gap. This article will delve into the mechanisms of Equilibria and its impact on Pendle and the entire Intrerest Rate swap sector.

vePendle holders enjoy multiple rights, including:

1. Voting rights for participating in incentive distribution
2. Improvement of PT/SY Pool Returns
3. 3% YT Intrerest Rate earnings
4. 80% AMM trading fee

These rights are by no means inferior to the current industry benchmark veCRV and have considerable value.

However, the two-year maximum lock-up period has had a certain impact on its liquidity. The emergence of Equilibria is precisely to address this issue. Its operation is similar to Convex, permanently locking vePendle and issuing ePendle tokens to users, helping to enhance the yields of Pendle AMM LP. At the same time, it distributes part of the enhanced yields to ePendle and vlEQB holders, while vlEQB can also enjoy additional incentive yields.

Pendle's recent rise is attributed, on one hand, to the mechanism updates brought by the V2 version, and on the other hand, to the emergence of sectors such as LSD and derivatives that can generate long-term returns, providing Pendle with a stable source of assets.

However, the potential of Pendle in terms of incentives has yet to be fully explored. Large institutions hold a significant share in LSD, and these institutions have a strong demand for regular returns. Theoretically, LSD protocols have the space to provide incentives on Pendle to meet these institutional needs.

Although Pendle has been running for two years, only 30 million of the 150 million circulating Pendle is currently locked, leaving ample space for the early development of Equilibria.

Equilibria recently announced that it will launch an event in May, airdropping 2% of the total $EQB tokens based on the amount of Pendle deposited by users. It is expected that this will lock a significant amount of Pendle currently in circulation. Considering that core team members of Pendle are also one of the multi-signature managers of Equilibria, a considerable portion of the Pendle held by the team may also flow in, which is expected to further increase the overall locking ratio of Pendle.

In addition, Pendle's tokenomics plan will implement a 2% perpetual incentive inflation after the rapid inflation period ends in 2026, which means that vePendle/vlEQB holders will have the opportunity to benefit from incentive earnings in the long term.

Since ePendle and vlEQB are interest-bearing assets themselves, theoretically they can combine with Pendle again to build their own YT/PT, achieving fixed Intrerest Rate and better serving institutional clients, while further promoting the development of the Pendle ecosystem and realizing a virtuous cycle of TVL growth. Even after Equilibria opens this path, other ve-token wrapping projects may follow suit and connect to the Pendle ecosystem, helping Pendle explore new markets.

In conclusion, Equilibria, as Pendle's "Convex", will further unleash Pendle's potential, helping to achieve flywheel growth and activate the entire Interest Rate swap ecosystem.