Pendle becomes second-largest protocol on XLayer by TVL in under a month

Pendle needed less than 30 days to become the second-largest DeFi protocol on XLayer, OKX’s EVM-compatible Layer 2 network. The yield tokenization platform has amassed $37.5 million in TVL on the chain, a figure that represents a remarkable chunk of XLayer’s total DeFi TVL of roughly $150 million. What makes this even more striking: nearly all of that capital flowed through a single market built around USDG, the Paxos-issued stablecoin backed by USD reserves and Treasuries. How Pendle carved out a quarter of XLayer’s DeFi Pendle launched natively on XLayer around August 11, 2026. Within weeks, the protocol’s TVL surged by 268% over a seven-day stretch, according to DefiLlama data. The catalyst was a carefully orchestrated combination of liquidity incentives and cross-protocol integration. On the incentive side, Pendle rolled out LP rewards designed to attract capital into its USDG yield market. On the integration side, the real accelerant was Aave V3. Around August 31 to September 1, Aave V3 on XLayer began accepting Pendle’s PT-USDG, the principal token representing fixed-yield positions on USDG, as collateral. The loan-to-value ratio came in at 93.59%, which means depositors can ...