Overview
Equilibria is a yield booster protocol that sits on top of Pendle Finance, following the same model that Convex Finance built on Curve. The protocol aggregates vePENDLE (vote-escrowed PENDLE) voting power from depositors, uses it to boost yields for Pendle LP positions deposited into Equilibria, and offers ePENDLE — a liquid token representing locked vePENDLE that can be traded rather than remaining locked for up to 2 years.
The value proposition is straightforward:
- For Pendle LPs: Deposit LP tokens into Equilibria to earn boosted PENDLE rewards without locking your own vePENDLE.
- For PENDLE holders: Convert vePENDLE to ePENDLE for liquidity, or deposit PENDLE to receive ePENDLE plus ongoing yield from the protocol's aggregated voting power.
- For EQB holders: Govern the protocol's vePENDLE voting allocation and earn protocol revenue.
This model was proven successful by Convex on Curve — by aggregating governance tokens, the booster protocol becomes a kingmaker that controls yield allocation across the base protocol's pools. Equilibria aims to replicate this dynamic on Pendle.
The protocol operates on Ethereum and Arbitrum, mirroring Pendle's main deployments.
Smart Contracts
Booster Architecture
Equilibria's contracts accept Pendle LP token deposits and stake them into Pendle's gauge system using the protocol's aggregated vePENDLE. The boost mechanism works through Pendle's native boosting: vePENDLE holders earn up to 2.5x PENDLE rewards on their LP positions. Equilibria's pooled vePENDLE provides this boost to all depositors.
ePENDLE Mechanism
ePENDLE is a liquid representation of vePENDLE. Users deposit PENDLE (which Equilibria locks as vePENDLE) and receive ePENDLE tokens. ePENDLE trades on DEXs, providing liquidity for users who want exposure to vePENDLE benefits without the 2-year lock. The peg between ePENDLE and PENDLE can vary based on demand and lock dynamics.
Code Quality
The contracts follow patterns established by Convex (a well-battle-tested model). The adaptation to Pendle's specific mechanics (PT/YT, time-decaying pools, gauge structure) requires custom logic. Code quality is adequate, though less extensively reviewed than Convex's contracts due to Equilibria's smaller scale.
Security
Audit History
Equilibria has been audited by PeckShield and other firms. The Convex-model architecture is well-understood, reducing the novelty risk of the smart contract design. However, the Pendle-specific integrations (gauge interactions, boost mechanics, PT/YT pool handling) introduce custom code that requires careful review.
Dependency on Pendle
Equilibria's security is layered on top of Pendle's contracts. A vulnerability in Pendle's gauge system, boosting mechanism, or LP contracts would directly impact Equilibria. This dependency is inherent to the booster model and cannot be mitigated.
ePENDLE Peg Risk
ePENDLE can trade at a discount to PENDLE if redemption demand exceeds new deposits or if market confidence in Equilibria declines. While not a security exploit, a significant ePENDLE depeg would result in losses for holders. The liquidity depth of the ePENDLE/PENDLE pool is critical for peg maintenance.
Track Record
Equilibria has operated without a major exploit since launch. The protocol has processed significant deposits and yield distribution without incident. Track record is positive but relatively short.
Yield Generation
Boosted Pendle Yields
The core yield proposition: Pendle LPs depositing through Equilibria earn boosted PENDLE rewards (up to 2.5x) without individually locking vePENDLE. This boost is real and significant — the difference between base and boosted yields on popular Pendle pools can be substantial.
Revenue Sources
Equilibria earns by: (1) taking a percentage of boosted PENDLE rewards from LP depositors, (2) earning yield from the protocol's vePENDLE position, and (3) distributing bribes/incentives received for vePENDLE vote allocation.
Yield Dynamics
Yield depends on: Pendle LP base yields, the size of Equilibria's vePENDLE position relative to total vePENDLE, the amount of LP tokens deposited (diluting the boost), and PENDLE token price. During Pendle's growth phase, yields have been attractive. If Pendle's growth slows or PENDLE price declines, Equilibria yields would decline proportionally.
Convex Model Validation
The Convex/Curve model has proven that booster protocols can generate sustainable yield by aggregating governance power. Equilibria's adaptation to Pendle follows this validated playbook, though Pendle's smaller scale means the total yield pool is smaller.
Adoption
TVL & Usage
Equilibria's TVL is moderate, typically $50-200M in deposited Pendle LP tokens. The protocol has attracted a meaningful share of Pendle LPs seeking boosted yields, but adoption is bounded by Pendle's total LP base and user awareness of the boosting opportunity.
Market Position
Equilibria competes with Penpie (another Pendle booster protocol) for vePENDLE aggregation. The competition mirrors the Convex vs. Aura dynamic on Curve/Balancer. Equilibria holds a competitive position but has not achieved the market dominance that Convex achieved on Curve.
EQB Governance
EQB token holders direct Equilibria's vePENDLE votes to specific Pendle pools, creating a bribe market where protocols pay EQB holders to vote for their pools. This governance dynamic adds utility to EQB but is still developing.
Tokenomics
EQB Token
EQB is the governance token that controls vePENDLE vote allocation. Holders can stake EQB for vlEQB (vote-locked EQB) to participate in gauge voting and earn bribes/protocol revenue. The Convex-model tokenomics are well-understood and provide clear value accrual through vote-directed incentives.
ePENDLE
ePENDLE serves as the liquid vePENDLE wrapper. Its value proposition is providing liquidity for locked governance positions. The ePENDLE/PENDLE exchange rate and liquidity depth are critical for the protocol's health.
Revenue Distribution
Protocol revenue (from LP boost fees, vePENDLE yield, and bribe income) is distributed to EQB stakers, ePENDLE holders, and the protocol treasury. The distribution mechanics follow established patterns from the Convex/Aura model.
Risk Factors
- Pendle dependency: Equilibria's value is entirely derived from Pendle. If Pendle's TVL declines, yield pools shrink, or PENDLE price falls significantly, Equilibria's value proposition degrades proportionally.
- ePENDLE peg risk: ePENDLE can trade below PENDLE if redemption pressure exceeds new deposits. A significant depeg would harm holders and erode confidence.
- Competition with Penpie: The two-protocol competition for vePENDLE aggregation splits the market and creates an arms race for deposits.
- Derivative risk stacking: Equilibria adds a layer of smart contract and operational risk on top of Pendle's already complex protocol. Users face compounded risk across both layers.
- Pendle yield compression: If overall DeFi yields compress, Pendle pool attractiveness declines, reducing LP deposits and Equilibria's value proposition.
- Scale limitations: Pendle's total LP market is significantly smaller than Curve's, capping Equilibria's potential scale relative to Convex's achievements.
Conclusion
Equilibria is a well-executed implementation of the Convex model applied to Pendle. The booster protocol provides genuine value — boosted yields for LPs, liquidity for locked vePENDLE, and governance-directed incentives for the Pendle ecosystem. The model is validated by Convex's success on Curve.
The 5.8 score reflects competent execution and real yield generation value, balanced against complete Pendle dependency, moderate adoption, ePENDLE peg risk, and competition from Penpie. Equilibria's ceiling is determined by Pendle's growth — if Pendle continues its trajectory as a major DeFi protocol, Equilibria benefits directly. If Pendle plateaus, so does Equilibria. The protocol is a levered bet on Pendle's continued success.