Aave DAO is discussing a new proposal to bring Pendle’s Principal Tokens (PTs) to the protocol’s V3 Core market.
The vote, launched on the Snapshot governance platform on April 7, runs through April 11 and has received unanimous approval from all 6,500 participating members.
The proposal aims to test the integration of PTs—assets that represent the principal value of yield-bearing tokens and mature at full value—into Aave’s ecosystem. Pendle, the DeFi protocol behind PTs, allows users to split tokens into two components: PTs and Yield Tokens (YTs). While PTs mirror fixed-income instruments by locking in the principal until maturity, YTs grant holders access to future yield streams.
Rather than an immediate listing, the proposal suggests starting with a single PT test asset, likely one linked to an already-supported token on Aave such as sUSDe. This cautious approach evaluates technical feasibility and user demand while minimizing risk exposure.
Aave plans to deploy a specialized pricing framework called the “linearly increasing lower bound” model to reflect the unique maturity-based value of PTs. Risk parameters will be finalized after further review by Aave’s designated risk service providers.
As interest in tokenized yield strategies rises, Pendle’s total value locked (TVL) has surged past $3 billion, with growing demand for using PTs as collateral. If adopted, the integration could unlock new borrowing opportunities and drive significant loan volume for Aave.
The Snapshot vote could set the stage for broader PT support in the future, even though onboarding the initial test token will be delayed pending further discussions on the associated assets.
Aave V3 leads in decentralized finance with a total value locked (TVL) of $16.2 billion and outstanding loans of $9.9 billion, as reported by DeFiLlama. Inflows in April have reached $1.3 billion, surpassing March’s $984 million. Stani Kulechov, founder of Aave Labs, recently confirmed that no new token will be introduced for Horizon, Aave’s real-world asset initiative, based on Aave DAO consensus.
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