Pendle Launches stHYPE Year Tokens to Tokenize Hyperliquid Fee Discounts

• Pendle has launched a new market mechanism allowing traders to access Hyperliquid Staking Tier Discounts via tokenized Year Tokens (YTs) associated with stHYPE, powered by Valantis Labs.
• The launch represents a significant expansion of Pendle's yield-trading infrastructure into the realm of tokenized utility without altering the core PENDLE tokenomics.
• Traders can now acquire fee discounts from stHYPE holders for a fraction of the cost of holding HYPE directly, securitizing exchange utility value.
• This development creates a live venue for trading a tokenized form of Hyperliquid fee discounts, introducing new trading activity.

Pendle has introduced a novel market structure that separates the fee discount benefit from the underlying stHYPE asset. This separation allows fee discounts to become purchasable by any trader and sellable by any HYPE holder . The stHYPE Year Tokens (YTs) now serve as the market price for a Hyperliquid fee discount, creating a tradable instrument where none existed before .

The mechanism allows traders to buy these YTs directly within the Pendle market to access lower fees on the Hyperliquid exchange . Conversely, stHYPE holders who do not require fee discounts can sell these YTs to earn additional yield . This structure creates a new source of trading activity and liquidity around the product, enabling stakers to monetize their staking benefits by selling the discount rights .

How does the stHYPE market operate for traders and stakers?

The market launched on August 27, 2026, and expires on January 28, 2027, with plans for a follow-on market ahead of expiry . Traders can acquire stHYPE YTs on Pendle to open a trading discount at prime.valantis.xyz . Deven Matthews, co-founder and CEO of Valantis Labs, emphasized that more than $40 million a year in fee savings were previously illiquid and unpriced .

"A trader who needs lower fees can now rent them. A holder who doesn't can sell them and earn more for it," Matthews stated . This setup allows traders to rent lower fees and holders to monetize unused benefits, creating a true market for token utility . Valantis Labs, the ecosystem behind stHYPE, focuses on liquid staking and trading on Hyperliquid .

Pendle serves as the leading protocol for tokenizing and trading yield across major chains, including Ethereum, Arbitrum, and HyperEVM . The integration with Valantis Labs represents a market and product expansion for Pendle rather than a direct change to its token economics . By facilitating the trading of utility-based YTs, Pendle is broadening its appeal to traders seeking cost efficiencies on other platforms .

What other structural changes are happening within Pendle?

Beyond the stHYPE market, Pendle is phasing out its vePENDLE governance token in favor of a new liquid staking token called sPENDLE . The transition aims to address limitations in the existing system, specifically the lack of liquidity and interoperability associated with non-transferable vePENDLE . Under the new sPENDLE structure, users can lock their tokens and withdraw after a 14-day unwinding period, or redeem instantly for a 5% fee .

This flexibility contrasts with the previous system, which required long lock-up periods that prevented users from accessing funds . Additionally, sPENDLE will be integrated with multiple DeFi platforms, enabling its use for restaking and other blockchain applications . Governance participation is also being simplified, with voting required only on critical protocol proposals .

Pendle will conduct $PENDLE token buybacks using up to 80% of protocol revenue to distribute as governance rewards . The protocol, ranked as the 13th-largest DeFi platform by total value locked at nearly $3.5 billion, generated over $37 million in 2025 . The rollout includes a snapshot of vePENDLE balances on January 29 to facilitate the switchover .

In a separate initiative, Saturn Foundation is providing $32,000 in yield token (YT) incentives to the USDat Pendle market on Ethereum . Pendle is co-distributing PENDLE tokens to support this initiative, aiming to stimulate trading activity and token usage for the Jan 14 rollover product over a one-month period . The program distributes rewards at a rate of $8,000 per week from August 27 to September 27 .