Pendle Launches Boros Platform: Funding Rate Trading for Perpetual Contracts and Ethereum on Arbitrum.
On August 6, according to information from CoinDesk, Pendle - a prominent DeFi protocol specializing in yield tokenization - officially launched Boros, a new platform that allows users to directly trade funding rates for Bitcoin (BTC) and Ethereum (ETH) perpetual contracts. The platform is deployed on the Arbitrum network and promises a completely new approach to hedging and speculating on funding rate volatility on major derivative exchanges like Binance.
The highlight of Boros is the introduction of a new asset called "Yield Units" (YU). Each YU represents 1 nominal unit of the underlying asset (e.g., 1 ETH or 1 BTC) with the expected funding rate yield to be realized before maturity. The structure of YU is similar to Pendle's yield tokens, allowing users to invest based on expectations of rising or falling funding rates - a key factor determining the cost of holding a perpetual contract position.
The initial deployment phase of Boros will limit the open interest to $10 million per market, with a maximum leverage of 1.2x. Although Pendle plans to expand funding rate trading products for assets like Solana (SOL), Binance Coin (BNB), and integrate with exchanges like Hyperliquid and Bybit, the development team says they will proceed cautiously to ensure effective risk management and system safety verification.
Boros also comes with a vault system for LPs, allowing them to deposit capital to receive transaction fee rewards, PENDLE tokens, and positive APR when the market moves favorably. The PENDLE token incentive mechanism will be distributed based on nominal trading volume and order flow. Additionally, referral programs and transaction fee rebates will be implemented in the near future to attract more liquidity and new users to the platform.
Funding rate is a mechanism used in perpetual contracts - a popular derivative in the crypto market - to help the derivative contract price always track the spot price of the underlying asset like Bitcoin or Ethereum.
Funding rate is a fee paid periodically (e.g., every 8 hours) between the buyer (longing) and seller (short) of a perpetual contract. If the funding rate is positive, those in a long position must pay fees to those in a short position. If the funding rate is negative, those in a short position must pay fees to those in a long position.
