The Pendle ecosystem welcomes a new growth engine, Interest Rate swaps enter a new era.

After Pendle achieves a tenfold rise in TVL and coin price, the flywheel effect of its ecosystem is about to kick in. As a token that adopts the ve-tokenomics mechanism, Pendle has long lacked a project similar to Convex to fully unleash its potential. The birth of Equilibria is precisely to fill this gap, and this article will analyze its operating mechanism and its impact on Pendle and the entire Intrerest Rate swap track.

vePendle holders can enjoy the following benefits:

1. Participate in the voting decision for incentive distribution
2. Increase the yield of PT/SY pool
3. Obtain a 3% YT Intrerest Rate yield
4. Share 80% of AMM trading fees

These rights are comparable to the current industry benchmark veCRV and have considerable value.

However, the two-year maximum lock-up period has caused some issues with its liquidity. The emergence of Equilibria is quite similar to Convex; it permanently locks vePendle and issues ePendle tokens to users, helping to enhance Pendle's AMM LP returns, while distributing part of the gain to ePendle and vlEQB holders, with vlEQB enjoying corresponding reward gains.

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

However, the potential of Pendle's reward mechanism has yet to be fully explored. Professional institutions hold a significant share in the LSD sector and have a strong demand for regular offerings. Therefore, the LSD protocol theoretically has the space to provide rewards on the Pendle platform to meet these institutional needs.

Although Pendle has been operating for two years, only 30 million of the 150 million Pendle in circulation are currently locked, leaving some room for the initial 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, which is expected to lock a significant amount of circulating Pendle. Additionally, since core team members of Pendle are also participating in Equilibria's multi-signature management, a considerable portion of the Pendle held by the team is expected to flow in, further enhancing the overall locking ratio of Pendle.

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

Since ePendle and vlEQB are income-generating assets themselves, theoretically they can be combined with Pendle again to build their own YT/PT, achieve a fixed Intrerest Rate, better serve institutional users, and further promote the development of the Pendle ecosystem, achieving a flywheel rise of TVL. Even after Equilibria opens this path, other ve-token wrapping projects may also learn from and connect to the Pendle ecosystem, helping Pendle expand into new market areas.

In conclusion, Equilibria can be seen as the Convex of Pendle, and its emergence will further unleash Pendle's potential, aiding its flywheel growth and activating the ecosystem of interest rate swaps.