Integrate staked VLR (seVLR) into Pendle Finance, a leading DeFi protocol that enables users to trade and manage yield.
When seVLR is deposited into Pendle, it is split into two transferable components:
PT (Principal Token): represents the principal value of seVLR and provides fixed-rate yield until maturity.
YT (Yield Token): represents the right to the future yield, which can be traded or compounded for variable returns.
By listing seVLR on Pendle, Velora can convert its staking system from a passive yield model into an active yield market, allowing participants to fix, hedge, or speculate on Velora’s revenue-based APR. This enhances visibility, trading activity, and integration opportunities across the DeFi ecosystem.
How Will This Idea Help VLR Growth:
Promotes staking adoption: seVLR holders gain new ways to manage yield risk and enhance returns.
Expands utility: turns seVLR into a composable, tradable yield asset used across protocols.
Improves visibility: listing on Pendle showcases VLR’s yield mechanics to a wide DeFi audience.
Drives liquidity and volume: Pendle markets attract traders, LPs, and aggregators, increasing on-chain activity.
Creates a benchmark yield curve: PT/YT pricing reveals the market’s view of Velora’s forward APR, a valuable governance signal.
Mapped KPIs or Expected Impact:
TVL in seVLR Pendle markets: ≥ $500k after 3 months
Average daily trading volume: ≥ $50k
Staking participation: +10–20 % increase in seVLR TVL
Unique wallets interacting: ≥ 100 users across Pendle × Velora
PT vs. realized APR gap: within ±5%, showing efficient yield discovery
Preliminary Feasibility Assessment:
Technical: seVLR is confirmed transferable ERC-20 — fully compatible with Pendle’s standardized yield architecture (SY).
Operational: Pendle listings are permissionless; no DAO-level code change needed.
Ecosystem fit: both Pendle and veVLR support Ethereum and Base chain, simplifying coordination of liquidity, analytics, etc.
Precedents: similar integrations of LPs listing have proven composable.
How Will the Idea Be Implemented?
Integration Design: confirm seVLR contract interface and reward model with Velora Core.
Adapter Development: build & test SY-seVLR (Pendle Standardized Yield wrapper).
Market Deployment: deploy initial PT/YT-seVLR market on Ethereum/Base with one quarterly maturity.
Liquidity & Awareness: seed initial TVL and run a community campaign explaining fixed/variable yield options.
Monitoring: publish a simple dashboard tracking TVL, APR, volume, and wallet participation; roll over markets quarterly.
Thank you, @TiD_Research for this strong proposal. The move to make seVLR a composable yield asset on a protocol like Pendle is an exciting prospect. Could you elaborate on the primary risks or potential integration challenges one could anticipate during the adapter development ,implementation and launch phases?
Thanks for the support, @Eren_DAOplomats! We have categorized the primary risks into three distinct buckets, along with suggested mitigation strategies for each:
1. Technical & Integration Risks (The Adapter)
The core technical challenge is the Standardized Yield (SY) Adapter. This contract acts as the “translator” between Velora’s staking mechanism and Pendle’s yield engine.
If the adapter incorrectly calculates exchange rates or fails to handle a reward distribution event from Velora, it could lead to pricing discrepancies or, in a worst-case scenario, fund lock-ups.
We are not reinventing the wheel. The process will involve forking Pendle’s battle-tested SY templates used for similar ERC-4626 or compounding assets. Furthermore, the budget includes a provision for a lightweight external security review (audit) of the adapter code before mainnet deployment.
2. Market & Liquidity Risks (Yield Volatility)
This is particularly nuanced for a real-yield asset like seVLR.
Impermanent Loss & Pricing Unlike fixed-inflation tokens, seVLR’s yield is derived directly from Velora’s protocol revenue. Therefore, the pricing of the future yield (YT) relies heavily on the market’s forward-looking projection of that revenue.
If the market anticipates a high revenue month (pumping the YT price) but the actual realized staking yield comes in lower, the rapid re-pricing of yield expectations will cause divergence.
This volatility between projected revenue and realized revenue is the primary driver of Impermanent Loss (IL) for liquidity providers in yield markets.
We suggest implement conservative initial parameters for the AMM curve to concentrate liquidity where yield is most likely to trade based on historical revenue data. Additionally, we also suggest start with a “Guardrail Phase” (cap on deposits) to allow the market to find equilibrium on pricing Velora’s revenue volatility before we encourage deeper liquidity.
3. Operational & Maturity Risks (The “Rollover”)
Unlike a standard Uniswap pool, Pendle markets have an expiry date (Maturity).
There might be “Zombie Markets.” If a pool matures and there is no active coordination to “roll over” liquidity to a new maturity date, the integration becomes stagnant, and users are left holding expired PT tokens.
We suggest building a Quarterly Rollover Framework into the proposal. This ensures that 2 weeks prior to maturity, a governance signal or operational check is triggered to prepare the next pool, ensuring continuous, unbroken liquidity for seVLR holders.
We view the Smart Contract Risk as the highest priority (solved via audit/testing) and the Yield Pricing Risk as the most unique to this specific asset type. By adhering to Pendle’s existing standards and managing initial liquidity parameters carefully, we believe these risks should be handled and monitored properly within manageable bounds for the DAO.
Spectra is indeed permissionless and technically capable. However, the goal of this proposal is Growth and Visibility, not just utility. When we look at the data, the difference is clear:
TVL: Pendle holds ~$3.5B in TVL, whereas Spectra is in the ~$40M range.
Volume: Pendle sees tens of millions in daily volume; Spectra sees significantly less.
The Verdict: Listing on Spectra would be “easier” but would likely result in a ghost town. Listing on Pendle exposing Velora to the largest yield-trading user base in DeFi. We believe the extra coordination effort is worth the difference in potential exposure.
