Today we are sitting down with TN Lee, who is the founder of Pendle - the world's largest crypto yield trading platform.
We put forward 12 strategic questions that were designed to unveil how TN navigated DeFi in the early days, his thoughts on Bitcoin DeFi, and his current focus/future outlook.
So without further ado, let's dive in.
Early DeFi Days
1. First exposure to DeFi
What first drew you into DeFi?
Like many others, I was first drawn to DeFi during the peak of DeFi Summer, when yield opportunities were exploding. It wasn’t uncommon to see APYs in the five or even six-digit range, a stark contrast to the low single digit yields we were used to in traditional finance.
To me, that was a groundbreaking eye opener to the potential of DeFi. That was also when the idea for Pendle started to take shape. These ultra high yields were often fleeting and we were thinking - what if you could lock in those high yields, secure them at a fixed rate, and remove the uncertainty?
2. Watershed moment
Which “project” or “event” in the early days made you realize that DeFi could move beyond just a niche in crypto, to a legitimate subsection of the financial industry?
One of the key moments that made me realize DeFi could become more than just a niche was seeing the rise of Aave and Compound. It was the first time a decentralized protocol truly replicated what a traditional bank does in facilitating deposits and loans, entirely onchain and without intermediaries. Users could earn interest or borrow against their assets in a fully automated and transparent way, accessible to anyone with an internet connection.
That was a turning point. If DeFi could successfully recreate a fundamental building block of traditional finance, it begged the question: why stop there? If lending and borrowing could be reimagined, then more complex instruments like swaps, structured products, and yield markets could be as well.
3. Early lessons learned
Looking back on the initial chaos of DeFi (figuring out the most optimal tech, yield-generation model and community building strategy), what was the toughest lesson you had to learn as a founder/contributor?
From Pendle’s inception in 2021 to where we stand today, the journey has been anything but easy. Through the ups and downs, one of the hardest things wasn’t just navigating the challenges, it was holding onto our conviction and pressing forward when the path ahead wasn’t always clear.
Oftentimes, it’s not about how difficult the challenges are, but about how we can adjust our mindset in the face of adversity to confront challenges head-on and solve problems.
As you know, we didn’t immediately find PMF. It took us over 2 years before Pendle V2 found meaningful momentum during the early days of LST. But more so than a personal quality, what truly matters is embedding it into the DNA of your team - staying hungry together, maintaining a culture of excellence, and moving as one unit towards a shared mission. That’s how momentum is built, and sustained.
Considering how rapidly the space evolves, with its own rules, rhythms, and culture. Being able to pivot quickly, whether it’s refining your product to match the narrative of the moment, or tuning your marketing strategy for a crypto-native audience, are all the small things that can make all the difference.
Additionally, I’ve always been extra mindful that Pendle consistently maintains a lean team model, being extremely prudent with company expenses to ensure we have sufficient runway to support our future growth.
4. Evolving philosophy
How have your views on decentralization and governance changed since your first foray into DeFi (if at all), and are there any principles/stances you hold more firmly now?
I've always had strong conviction in DeFi. But in a space that moves as quickly as this one, you need the flexibility to adapt and evolve. That mindset has been core to how Pendle operates: staying grounded in our principles while remaining open to change to ensure we always maintain product-market fit.
Today, one of our biggest priorities is building Pendle Permissioned, a gateway for regulated TradFi institutions to access best-in-class DeFi yields. At the same time, our other product, Boros, is designed to support any form of yield, whether it's native to DeFi, from TradFi, onchain, or even offchain sources like mortgage rates or U.S. T-Bills.
Our initial focus on funding rates is a perfect example. It's an offchain yield source, yet remains one of the most promising untapped opportunities in the entire space. Limiting ourselves only to DeFi-native yields would be missing the bigger picture, and it would constrain Pendle’s long-term potential, especially considering how much bigger the TradFi yield sector is.
At its core, Pendle’s architecture is fundamentally DeFi. But that doesn’t mean our offerings must remain confined to the onchain world. I believe the future lies in building these hybrid rails, infrastructure that bridges traditional finance and DeFi, bringing new users and capital into the ecosystem.
This is how DeFi can reach the masses.
Bitcoin DeFi
1. Bitcoin DeFi - Yay or nay?
In your honest opinion, do you believe Bitcoin DeFi is an enticing value-proposition or not? Please elaborate.
Absolutely. Bitcoin is arguably the best asset for preserving wealth, often compared to digital gold. But while it excels at holding value, it doesn’t natively produce yield, and that presents both a challenge and an opportunity.
The reality is, investors don’t just want to hold, they want their assets to work for them. We’ve seen this behavior time and time again, whether it was with gold, real estate, or now crypto. Capital naturally seeks productivity. Bitcoin DeFi taps into this demand by creating pathways for BTC holders to earn yield. It’s about unlocking more utility without compromising the asset’s core value proposition.
If the infrastructure can mature to a point where yield on Bitcoin becomes secure, native, and trust-minimized, then BTCFi could become one of the most powerful forces in DeFi. This is what Pendle is building towards.
There’s a massive amount of dormant capital sitting in BTC today. Activating even a small portion of it could open the floodgates for broader institutional and long-term investor participation.
2. Maximalism vs. synergy
Bitcoin maximalists often emphasize breaking away from fiat, security and hodling, while DeFi proponents value rapid innovation and yield. Do you think there’s a chance to bridge the philosophical gap?
I do think there’s a path to bridging that gap, but it has to be done with intention. Bitcoin maximalists prioritize security, sovereignty, and self-custody, which are all values I respect deeply. At Pendle, we’ve always believed that innovation shouldn’t come at the cost of trust or safety. That’s where DeFi can meet Bitcoin on common ground.
What’s needed are yield solutions that align with Bitcoin’s core principles. If BTC holders can access sustainable returns without giving up custody, or exposing themselves to unnecessary risk, the narrative starts to shift. It’s not about changing what Bitcoin is. It’s about unlocking more value from it, on its own terms.
So yes, I believe the gap is bridgeable. But it has to be through infrastructure that speaks to both audiences. DeFi can extend Bitcoin’s utility without compromising its foundation, and that’s where real adoption can start to happen.
3. Bitcoin adoption and regulatory progress
With Bitcoin now being considered as a potential strategic reserve currency by multiple governments across the world (notably the US), do you think this gives DeFi on Bitcoin an edge over DeFi on other blockchains, or will any impact be negligible?
I think Bitcoin being considered as a strategic reserve currency is a massive validation, not just for BTC itself, but for the entire crypto space. It sends a signal to the world that crypto is here to stay. Naturally, this puts a spotlight on Bitcoin-first innovation, including DeFi on Bitcoin. But I wouldn’t say it gives Bitcoin DeFi an exclusive edge over the rest.
What it really does is open the floodgates. When governments and institutions begin to take Bitcoin seriously, it legitimizes the broader ecosystem. That interest will extend beyond BTC into Ethereum, stablecoins, just as we’ve seen with the GENIUS act and other blockchain infrastructures. In many ways, Bitcoin’s recognition paves the way for more capital, more users, and more integration across the board.
So to me, it’s not a zero-sum game. Bitcoin’s rise benefits the entire industry. It’s a rising tide that lifts all boats, and DeFi whether on Bitcoin, Ethereum, or any other chain, stands to gain from that momentum.
4. Future prediction
If you had to make a prediction, do you think there will be more BTC locked in DeFi compared to Ethereum/other chains in 5 years? And why?
If I had to make a prediction, I’d say it’s too early to call a clear winner. The DeFi and crypto landscape evolves rapidly, often shaped by market cycles, regulatory shifts, and emerging technologies. While Bitcoin is gaining momentum as a DeFi asset, especially with new infrastructure being built around it, Ethereum and other smart contract chains still dominate in terms of developer activity, tooling, and mature DeFi protocols.
Rather than betting on one chain or asset, I believe we’ll see a future where both Bitcoin and Ethereum play complementary roles. BTC might become the ultimate collateral or base layer for value, while Ethereum continues to lead innovation and experimentation. In that sense, BTC and ETH can coexist as foundational pillars in DeFi, each serving different purposes but both critical to the ecosystem.
At Pendle, we don’t see it as a winner-takes-all scenario. Our strategy has always been to stay agile. Whether yield opportunities emerge from Bitcoin, Ethereum, Layer 2s, or even offchain assets, we’re building infrastructure that can adapt and scale with the narrative. Being flexible allows us to tap into whichever ecosystem is driving the next wave of adoption. After all in this space, the only constant is change.
Current projects & future outlook
1. Current focus
What are you most intensely working on right now, and how does it address the evolving needs of the DeFi community?
Our current primary focus is the stablecoin sector.
Following Ethena’s success, stablecoins have become one of the most popular and increasingly mature sectors in recent years. Pendle has already launched over 100 stablecoin pools. In the current volatile market environment, we believe the stablecoin sector will be one of the most significant narratives in this market cycle. This highly contested sector not only drives DeFi toward greater maturity but also serves as one of the few critical bridges to traditional finance.
A key part of Pendle’s 2025 roadmap is the strategic rollout of the Citadels initiative. This includes not only the development of Pendle PT as the most robust fixed-yield product, but also the active development of additional institutional-grade products to enable different types of institutional investors to participate. Currently, Pendle PT has reached an all-time high of $2.5 billion across various lending ecosystems.
Our team is also steadily working on bringing Boros to the public soon. For context, Boros is a standalone product, separate from Pendle V2, designed specifically for trading rates on margin, starting with funding rates. This is a first-of-its-kind product in DeFi, and we’re excited about the possibilities it opens up. It’s a bold step into a new vertical, and we’re confident that with the right execution, Boros can carve out a strong product-market fit.
2. DeFi breakthroughs
Can you share any specific breakthroughs or experiments you’re watching (or contributing to) that could redefine how we use or view DeFi?
One breakthrough we’re actively contributing to is our role as a launch partner for Converge, a purpose-built chain tailored for institutional adoption. It’s Ethereum compatible, but uniquely blends permissionless DeFi with KYC-compliant tokenized RWAs like BlackRock’s BUIDL. This setup creates a framework where institutions can interact with DeFi infrastructure in a way that aligns with regulatory and compliance standards.
Pendle’s core yield trading mechanisms are especially well-suited for this environment. As RWAs and institutional-grade products make their way onchain, the need for secondary markets, rate discovery, and structured yield strategies becomes essential. We’re helping build that layer with Pendle, offering capabilities similar to ETFs, swap desks, and structured product desks in TradFi, but with the advantages of full composability and 24/7 accessibility.
3. The rise of AI
As AI continues to increase in capability, how do you see it interacting with DeFi, and have you got plans to implement AI in your own project?
AI has the potential to significantly improve the DeFi experience, especially for new users. DeFi can be complex and intimidating, with its own jargon, cross-chain intricacies, and unfamiliar interfaces. AI can help abstract away that complexity, creating a smoother, more intuitive environment where anyone can participate, regardless of their technical background.
At Pendle, we're already integrating AI in small but meaningful ways. For example, we currently use an AI-powered prompt tool within the app to help users better understand how the platform works. It’s a step toward making DeFi more accessible and user-friendly.
Looking ahead, we're actively exploring more ways AI can enhance Pendle, whether through smarter data insights, improved user onboarding, or automating more advanced strategies. We’re not committing to one fixed implementation but staying open to how AI can continue to add value as the technology matures.
4. Vision for the next decade
Fast forward 10 years, what does the DeFi space look like?
Fast forward 10 years, I see DeFi becoming a fully integrated part of the global financial system. Traditional finance institutions will be active participants. We’ll see them interacting directly with DeFi protocols, contributing liquidity, issuing assets, and even building onchain.
By then, toolings like Pendle’s fixed yield markets will have matured to support not just onchain yields, but also offchain instruments from traditional finance. Think mortgage rates, T-Bills, and other real-world assets seamlessly tradable in DeFi environments. The infrastructure will have evolved to make these crossovers secure, compliant, and capital efficient.
Most importantly, the ecosystem will be thriving in both directions. Capital will flow freely between DeFi and TradFi, creating a dynamic landscape where innovation and regulation coexist. DeFi will be a core layer of global finance.
Keep up to date with TN Lee and Pendle at:
TN Lee - https://x.com/tn_pendle
Pendle - https://x.com/pendle_fi
Website - https://www.pendle.finance/
