Pendle Lowers PT Looping Fees with Dynamic Yield-Based Model

Pendle has made an adjustment to its PT Looping fees, aiming to reduce costs for users. The protocol's automated leverage tool for Principal Tokens now uses a dynamic fee model that scales based on projected yield. This new approach targets around 10% of the expected return from any given loop, with a maximum of 10 basis points (0.10%).

For lower-yield loops or those lasting only a short duration, fees will be significantly reduced, often dropping below the 10-basis-point ceiling. In contrast, previous charges were flat at 5 basis points on total notional assets, plus additional trading and gas costs.

PT Looping automates a strategy that DeFi power users have employed manually for years: holding Principal Tokens, borrowing against them as collateral, using the borrowed funds to buy more PTs, and repeating. This process is now bundled into a single automated process on Pendle's platform.