Is Penpie Safe?
Risk Grade: C (50/100)
Penpie is rated as elevated risk — multiple novel mechanisms and notable interaction risks.
High risk — proven security failures and total dependency on another protocol make this a fragile place to park funds
A yield booster that sits on top of Pendle, letting you earn higher returns by pooling voting power. It holds about $80M in deposits. Its D+ grade is driven by a $27M hack in September 2024 and the fact that your money is 100% dependent on Pendle staying safe -- if Pendle fails, Penpie fails with it.
TVL
$11M
Mechanisms
6
Interactions
5
Value Grade
C-
Key Risks for Penpie Users
Already hacked for $27M in September 2024 -- attackers created a fake market and drained funds through a code vulnerability
Every dollar in Penpie depends entirely on Pendle working correctly. If Pendle gets exploited, you lose everything here too
After a hack, the protocol faces a lose-lose choice: print new tokens (destroying existing holders' value) or let victims absorb the loss
Top Risk Factors
- •Exploited for $27M in September 2024 via reentrancy vulnerability in reward distribution, demonstrating critical smart contract risk in yield aggregation layer
- •Tight coupling to Pendle protocol creates single point of failure: any Pendle exploit or PT/YT market failure cascades directly to Penpie users
- •veToken governance model (vlPNP) creates governance capture risk and post-exploit hyperinflation scenarios similar to Rari/Indexed Finance failures
How Penpie Compares to Peers
Penpie ranks #110 of 116 Yield protocols (bottom quartile — among the riskiest). At a risk score of 50/100, it's 14 points riskier than the sector average of 36/100.
Adjacent peers: Harvest Finance (C, 48/100) is ranked just safer, and K3 Capital (C-, 51/100) is ranked just riskier.
See the full Yield sector leaderboard or the Penpie vs K3 Capital comparison.
Common Questions about Penpie
Plain-English answers based on Penpie's scores across Hindenrank's 8 risk dimensions. The highest-scoring (riskiest) dimension is Track Record (15/15).
Has Penpie ever been hacked or exploited?
Penpie has a documented incident history that materially raised its risk grade — the track record dimension scored 15/15, near the high end of the scale. Past exploits, governance failures, or contract issues are baked into this rating. Anyone considering deposits should review the incident details before allocating capital.
How much money is at stake in Penpie?
Penpie currently holds roughly $11M in user deposits. Smaller TVL means individual depositors carry a larger share of any loss event, and it can be harder to exit a position quickly during stress.
What's the worst-case scenario for Penpie?
Hindenrank has identified specific collapse scenarios for Penpie. The most prominent: "Pendle Ecosystem Contagion from Yield Aggregator Failure". The trigger condition is A critical vulnerability in Penpie's staking or reward distribution contracts is exploited, or Pendle itself suffers a major exploit, causing cascading losses across the entire Pendle yield aggregation ecosystem. Reading through the full scenario list on the protocol page is the single best way to understand the actual failure modes — generic "smart contract risk" is rarely the thing that takes a protocol down.
Is Penpie regulated or insured?
Penpie has low regulatory exposure on Hindenrank's framework (3/10). The protocol is structured in a way that minimizes counterparty and jurisdiction concentration, though regulatory risk in crypto can change rapidly. No DeFi protocol carries FDIC-style insurance — even with low regulatory risk, depositors are not protected in the way bank customers are.
What are the biggest red flags for Penpie?
Hindenrank's retail-focused risk audit flagged: Already hacked for $27M in September 2024 -- attackers created a fake market and drained funds through a code vulnerability Every dollar in Penpie depends entirely on Pendle working correctly. If Pendle gets exploited, you lose everything here too After a hack, the protocol faces a lose-lose choice: print new tokens (destroying existing holders' value) or let victims absorb the loss On the technical side, 1 critical-severity interaction risk has been identified.
Should beginners deposit into Penpie?
Penpie's C grade puts it in the elevated-risk band. This is not a beginner-friendly protocol. Anyone depositing here should treat the position as speculative and avoid concentrating significant savings in it.
How does Penpie compare to safer Yield alternatives?
Penpie is one protocol in Hindenrank's Yield coverage. The safest Yield protocols on the leaderboard tend to share three traits: a long incident-free track record, conservative mechanism design, and high-quality public documentation. Compare Penpie against the full Yield ranking before committing capital.
For the full 8-dimension score breakdown, the radar chart, and dependency graph, see the Penpie risk report.
Read the Full Penpie Risk Report
This protocol has 2 collapse scenarios. 1 critical and 2 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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