Pendle becomes second-largest DeFi protocol on XLayer

Pendle has become the second-largest DeFi protocol on XLayer, OKX’s EVM-compatible Layer 2 network, in less than 30 days. The yield tokenization platform has amassed $37.5 million in Total Value Locked (TVL), accounting for approximately 25% of XLayer’s total DeFi TVL, which is estimated at $150 million.

The protocol's rapid growth was driven by liquidity incentives and a strategic integration with Aave V3. Following the integration, Aave V3 on XLayer began accepting Pendle’s PT-USDG—a principal token representing fixed-yield positions on the USDG stablecoin—as collateral with a loan-to-value ratio of 93.59%. This created a composability loop allowing users to deposit into Pendle, use the tokens as collateral on Aave, and reinvest the borrowed funds.

A significant portion of the capital flow is centered around USDG, a stablecoin issued by Paxos. USDG currently represents over 92% of the approximately $1.7 billion stablecoin market capitalization on the XLayer network.