PENDLE functions as the governance token of PENDLE, by staking and locking into vePENDLE. With vePENDLE, users can boost their LP APY, receive a share of protocol revenue, vote for pools to direct incentives, and receive swap fees from voted pools.

Demand for PENDLE is mainly derived from the utility of vePENDLE, which can be used to boost pool rewards, direct protocol incentives (similar to the bribe system of the Curve ecosystem), and receive a portion of the protocol revenue. As demand for Pendle markets (and the DeFi yield market) rises, vePENDLE holders will be able to benefit directly from the growth of the protocol.

Pendle enables users to split yield-bearing assets into their principal and yield components, principal token and yield token, allowing these to be traded separately.
Creating a yield market in DeFi, Pendle unlocks the full potential of yield, enabling users to execute advanced yield strategies:
- Buy assets at discount
- Fixed yield for low-risk, stable growth
- Gain long exposure to future yield

vePENDLE hodlers are entitled to a cut of the protocol revenue collected, which includes a volume-weighted share of the swap fees collected from the voted pools (i.e. 80%), 3% of the fees collected from all yield accrued via YT, and all yields after the maturity of YT/PT

Pendle collects 80% of swap fees as protocol revenue. 20% goes to liquidity providers. This revenue is distributed pro rata to vePENDLE holders who voted for the pool, based on vote weight.
Pendle collects 3% from all yield accrued via tokenized yield, and all yields after the maturity of YT/PT. 
Fees are distributed pro rata to all vePENDLE holders, based on vePENDLE balalance