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Pendle adjusts PT Looping fees to reduce costs for users
The DeFi protocol switches from flat fees to a dynamic model capped at 10 basis points, making leveraged yield strategies cheaper for most users.
Pendle just reworked how it charges for one of its most popular features. PT Looping, the protocol’s automated leverage tool for Principal Tokens, now uses a dynamic fee model that scales based on how much yield a user actually stands to earn. The cap sits at 10 basis points, and for shorter or lower-yield loops, fees drop well below that ceiling.
What changed and why it matters
The new fee formula targets roughly 10% of the projected yield from any given loop, with an absolute maximum of 10 basis points (0.10%). That replaces the previous model, which charged a flat 5 basis points on total notional assets, plus whatever trading fees and gas costs piled on top.
Under the dynamic model, lower-yield loops get proportionally cheaper fees. Meanwhile, someone running a short-duration loop on a modest yield might pay just a few basis points. For context, a basis point is one-hundredth of a percentage point. Ten basis points on a $100K position is $100.
How PT Looping actually works
PT Looping is Pendle’s way of automating a strategy that DeFi power users have been doing manually for years. The basic idea: you hold Principal Tokens, borrow against them as collateral on a lending platform like Aave or Morpho, use the borrowed funds to buy more PTs, and repeat. The manual version requires bouncing between multiple protocols, executing several transactions, and paying gas fees at every step. PT Looping bundles all of that into a single automated process.
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In August 2026, Pendle ran incentive programs that delivered an additional 2% APY boost for PT Looping users, with pool caps raised to $15M for select opportunities. The fee structure update was announced September 18, 2026.
For traders and liquidity providers already active in Pendle’s ecosystem, the immediate effect is straightforward: running PT Looping strategies just got cheaper in most scenarios. The previous 5 bps flat fee on total notional could exceed the new dynamic fee significantly, especially for shorter-duration or lower-yield positions where the 10% of projected yield calculation produces a number well below the cap.