Pendle saw a breakout year in 2024. Its TVL rose from $20M to $4.6B, driven by integrations with staked/restaked ETH derivatives (LSTs and LRTs), an active community, and strong airdrop momentum.

Spectra rebranded from APWine in June 2024, focusing on permissionless pool creation and integrations with stable, real-yield assets like csUSDL (Coinshift), USR (Resolv), and many more. Its TVL grew from $20M to around $190M by early 2025—not as fast as Pendle, but with consistent traction across Base and other L2s.

Spectra is also working on MetaVaults, an upcoming feature designed to automate liquidity rollovers and improve capital efficiency across yield markets. For a closer look at how Spectra works under the hood, check out our previous technical deep dive.

Let’s break down how both protocols got here, how they differ, and what their growth strategies say about the future of yield in DeFi.

Disclaimer:

This article is for informational purposes only and does not constitute financial advice. All data related to token prices, market cap, and protocol TVL is based on publicly available sources such as DeFiLlama. The analysis and opinions expressed here are independent and do not represent the official views of Spectra, Pendle, or any affiliated projects.

Spectra vs Pendle: Growth Trajectories

Pendle’s Explosive Growth: A First-Mover Advantage

Pendle took an early lead in the yield derivatives space by turning future yield into tradable assets. Its TVL surged to $5.2B by mid-2024, fueled by the liquid staking boom and early integrations with staked ETH derivatives like Lido’s wstETH and Renzo’s ezETH.

Key drivers of Pendle’s growth included:

• Early support for popular yield-bearing tokens.
• A vePENDLE model that directed emissions toward high-demand pools, encouraging deep liquidity.
• A bribe-driven governance system that incentivized active participation and boosted token utility.

As TVL climbed, so did protocol revenue and user engagement—creating a flywheel effect. Pendle’s native token responded in kind, rising 20x in 2024, supported by a strong narrative around yield innovation and increasing fee accrual.

Pendle’s historical TVL growth. Source: https://defillama.com/protocol/pendle

Spectra’s Quiet Relaunch and Breakout Moment

Spectra took a different approach—choosing a strategic, phased rollout rather than a splashy launch. After relaunching in June 2024 with curated yield markets, adoption was initially modest. But that changed in December 2024, when Spectra’s TVL jumped from $20M to over $190M in a matter of weeks.

The catalyst? The rapid rise of Resolv Labs’ USR, a stablecoin that saw a wave of demand for fixed yield options.

Spectra quickly became the primary venue for USR deployment, especially for users seeking predictable, fixed-rate returns. By year-end, USR accounted for over 80% of Spectra’s TVL.

Spectra’s historical TVL Growth. Source: https://defillama.com/protocol/spectra-v2#information

USR and Spectra: A DeFi Flywheel

USR saw a breakout moment in late 2024, with TVL jumping from $36M to nearly $400M in under a month. Spectra quickly became the go-to platform for users looking to lock in fixed yields on USR.

A few key factors kicked off the flywheel:

• Spectra was one of the earliest platforms to offer fixed-yield options for USR holders, giving it a head start in capturing stablecoin-native yield seekers.
• Incentivized pools—funded by both SPECTRA emissions and Resolv’s yield mechanisms—attracted liquidity quickly.
• As liquidity flowed in, more users rotated into the USR-Spectra strategy, chasing competitive fixed yields alongside potential airdrops.

Resolv’s TVL followed a nearly identical growth curve as seen with Spectra, showing how closely the two protocols became intertwined. Yield farmers, in particular, were drawn to the combo of Spectra’s incentives and Resolv’s stablecoin-backed returns.

Resolv Lab’s TVL Growth. Source: https://app.resolv.xyz/overview

This created a self-reinforcing growth loop. By December 2024, Spectra’s TVL climbed from roughly $20–25M to $143M, right as the USR pool crossed $300M. With Spectra offering one of the first platforms where users could deploy USR at a fixed yield, a large portion of the new USR supply funneled directly into its markets.

The effect was clear:

More USR in circulation → More demand for fixed yield → More TVL flowing into Spectra → Growing user confidence → Repeat.

Spectra’s Discord and social channels quickly picked up on the trend. Some even described it as a “Pendle-like moment”, as Spectra showed signs of catching up in TVL.

Spectra’s pool composition shifts as more yield assets are added. Source: https://defillama.com/protocol/spectra-v2#tvl-charts

The Morpho Loop: Pendle’s Flywheel, Spectra’s Opportunity

One of the most powerful strategies behind Pendle’s recent stablecoin TVL growth is the leveraged yield loop—a recursive strategy where users borrow and lend against Principal Tokens (PTs) to amplify fixed yield exposure.

Often referred to as the “Morpho loop” or stablecoin carry trade, this strategy showcases DeFi composability in action. Here’s how it works, using PT-USR on Pendle as an example:

(i). Acquire a Yield-Bearing Stablecoin

The user starts with a base stablecoin like USDC or DAI, and converts it into a yield-bearing form such as wstUSR (wrapped staked USR).

(ii). Split into PT and YT on Spectra

The user deposits wstUSR into Pendle, minting a pair of PTs and Yield Tokens (YTs).

Most looping strategies involve holding the PT, since it’s relatively stable in value and accrues to full face value at maturity. The user may sell the YT for instant yield or use it elsewhere.

(iii). Use PT as Collateral on Morpho

The user takes the PT (e.g. PT-wstUSR) and supplies it to Morpho as collateral.

For example, the PT-wstUSR/USR market on Morpho allows users to borrow USR against their PT collateral.

(iv). Reinvest the Borrowed Stablecoin

The borrowed USR is then converted back into wstUSR, deposited again into Pendle to mint more PT and YT, and the process repeats.

The Result: More PTs, More Yield, Same Capital

The result from the Morpho loop is a leveraged fixed-rate position:

The user ends up holding more PTs than their original capital would allow, meaning that at maturity, they receive a larger amount of stablecoins back, based on the fixed yield locked in via the PT’s redemption value.

So why does this matter?

The PT-USR loop is a textbook example of DeFi composability—combining stablecoin issuers, yield protocols, and lending markets into a self-reinforcing flywheel.

The strategy looks something like this:

Mint stablecoin → Split into PT/YT → Use PT as collateral → Borrow → Repeat.

This stablecoin yield playbook has become a key factor behind the TVL growth of Pendle, as it allows users to scale exposure to fixed yield while putting idle stablecoins to productive use.

What It Means for Spectra

Currently, this loop exists on Pendle, not Spectra. However, Spectra is actively working with Morpho and ecosystem curators to bring Spectra-PT markets to Morpho. Once live, this same strategy could unlock a new wave of growth for Spectra—especially given its deep focus on stablecoin-native yield markets and permissionless pool creation.

In other words: Pendle’s flywheel is running today. Spectra’s version is still loading—but if the mechanics are replicated, the upside could be significant.

The leveraged yield loop strategy in action.

TVL Growth and Token Price Correlation

Both Spectra and Pendle offer strong examples of how protocol TVL growth often correlates with token price performance—especially when the token captures value through fees, emissions, or governance.

Pendle

Pendle’s explosive TVL growth in 2024 directly translated into strong token performance:

• TVL jumped from $230M to $6.7B, marking a major increase in market share.
• PENDLE rallied from around $1 to an all-time high of $6.67, a gain of nearly 590%.

This wasn’t just speculation. Pendle’s vePENDLE model introduced fee sharing and governance weight, so more TVL meant more protocol revenue—and more incentive to lock PENDLE for gauge votes and bribes.

At its peak, Pendle had $4.6B in TVL and a market cap of $644M, putting its TVL-to-market cap ratio at ~14%. That “undervalued” look helped fuel continued buying. Eventually, market dynamics caught up—after peaking in April, the token pulled back from ~$7 to the $2–$4 range as some TVL left with the expiration of popular yield pools.

Still, the broader trend held: as Pendle’s TVL grew, so did demand for the token. Strong fundamentals—TVL, revenue, and token utility—drove the narrative and investor attention.

Even into early 2025, as Pendle’s TVL fluctuated between $3.5B and $5B, the token remained in the multi-dollar range, signaling that the market was still pricing in future upside, not just present TVL.

$PENDLE token price vs. TVL. Source: https://defillama.com/protocol/pendle?tokenPrice=true

Spectra

Spectra’s token history is more recent, but early data shows a clear correlation between TVL growth and token price movement.

• TVL grew from $20M to $143M in December 2024 alone, largely fueled by USR integrations and stablecoin yield demand.
• SPECTRA launched at $0.07 in early December and climbed to an all-time high of $0.23 within weeks—marking a ~310% increase.

After peaking in early January, SPECTRA’s price cooled, settling around $0.04–$0.05 by March 2025, even as TVL remained steady above $150M. This suggests the initial price spike may have outpaced usage and fee generation, with the market adjusting expectations accordingly.

At its peak price of $0.236, Spectra’s circulating market cap was around $80M, which was over 50% of its $143M TVL—a much higher MC/TVL ratio than Pendle had during similar growth phases. Once that imbalance became clear, the premium faded.

By March 2025, with $190M TVL and a $14M market cap, Spectra’s market cap stood at just ~7% of TVL—arguably undervalued when compared to Pendle at similar points in its growth curve.

If Spectra continues to scale and activate governance mechanics like veSPECTRA, token demand could follow. A jump to $1B+ TVL, assuming strong fee generation and sustained adoption, could prompt a meaningful re-rating of the token.

$SPECTRA token price vs. TVL. Source: https://defillama.com/protocol/spectra?tokenPrice=true

Can Spectra Match Pendle’s Trajectory?

Pendle has already proven there’s strong demand for tokenized yield, with billions in liquidity and a clear product-market fit. Spectra is now building on that foundation—focusing on stablecoin-native strategies, composable lending integrations via Morpho, and a permissionless design that opens the door to broader participation.

As the yield landscape continues to evolve, Spectra’s path looks increasingly solid. If it can sustain growth, activate long-term token incentives through veSPECTRA, and continue attracting real users, it could very well become the next major player in the space.

It’s still early—but the pieces are coming together.

If you’ve made it this far, you’re likely just as curious about where Spectra fits into the future of DeFi yield markets as we are. We sat down with Spectra’s Co-Founder at ETH Denver to dive deeper into what they’re building—

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