The Dynamic Incentive Cap mechanism recently announced by Pendle is one of my most optimistic protocol upgrades in the near future. The core of this mechanism is to dynamically adjust the incentive cap of each pool based on its Swap Fee ratio, linking incentive allocation to actual transaction contributions. The initial upper limit of the new pool is 5%, and it will be dynamically adjusted every week based on the proportion of transaction fees in the past 7 days, up to a maximum of 20%. At the same time, a set of formulas will gradually reduce pools with low trading volume but occupying a large amount of incentives, and increase the incentive upper limit of high trading volume pools. Prior to this, Pendle's incentive allocation was more TVL oriented, which resulted in the platform exhibiting a largely "neutral mining" feature - liquidity providers receiving incentives, but the revenue growth of the protocol itself did not synchronize with it. Many LP strategies are essentially hedging risks, collecting incentives, and locking in returns, with limited contribution to Pendle's fee income. The emergence of Dynamic Cap directly links incentive mechanisms with platform revenue. Incentives are no longer just about attracting funds to pile up in a pool, but guiding liquidity towards markets with real trading demand. For Pendle, this means higher protocol revenue, more efficient incentive use, and a healthier and more sustainable ecological structure. More importantly, this mechanism is expected to change Pendle's current structural problem - transforming from an essentially neutral mining platform to a transaction driven revenue platform. The unity of incentive and revenue goals will put LP and agreement on the same side, with both parties hoping for higher transaction volume and greater contribution to transaction fees. This not only enhances the platform's profitability, but may also become an important turning point in Pendle's valuation logic. I believe that once the testing phase is completed and fully launched, if the data performance meets expectations, this mechanism will become a key catalyst for Pendle's long-term revenue growth and market reassessment. It is expected that various agreements will strongly incentivize the trading of SY-PT in order to compete for Pendle emissions. pendle realyield DeFi