Boros: Devour Decentralized Finance, CeFi, TradFi, unlock Pendle's next hundredfold rise engine.

If you had to nominate the most innovative DeFi protocol, who would you choose?

Pendle must surely be on the list.

In 2021, Pendle, as the first DeFi protocol to focus on the “interest rate swap” market, single-handedly opened up a yield trading market worth billions, becoming the absolute leader in the yield trading space.

In August 2025, Pendle's innovative core of “daring to be the first” continues with the launch of Boros, opening up the on-chain revenue blind spot of “funding rates”. For the first time, it brings trading, hedging, and arbitrage opportunities for funding rates to the DeFi world, sparking public discussion and a renewed wave of investment enthusiasm.

According to the latest data from Pendle, as of now, Boros has been online for two months, with a cumulative nominal trading volume exceeding $950 million, an open contract size exceeding $61.1 million, and the number of users surpassing 11,000+, with an annualized income of over $730,000.

In just a month, it has already achieved the accomplishments of many projects over several years. Meanwhile, many participants excitedly express: the profit potential of playing with Boros could even be more lucrative than Meme.

So, what is Boros? How to play? What are the future plans?

Many people may have noticed that Boros's brand visuals often feature a giant whale that devours everything, and the word “Boros” also has the meaning of devouring in ancient Greek. With the release of Boros 1.0, the launch of the recommendation program, and the introduction of more markets, perhaps Boros's devouring of the world of earnings is officially unfolding through funding rates.

Why is the “funding rate” the first shot to establish the reputation of Boros products?

As a structured interest rate derivatives platform, Boros currently focuses on the funding rate, aiming to transform the funding rate into a tradable standardized asset.

Most contract users are likely familiar with the funding rate; it is like an “invisible hand” in the contract market, balancing the perpetual contract prices with spot prices. Its specific operational logic can be simply understood as:

When the funding rate is positive, it indicates that the majority expect prices to rise, with the bulls being strong. The contract price is higher than the spot price, and the longs need to pay the funding rate to the shorts to curb excessive optimism in the market.

When the funding rate is negative, it indicates that most people expect the price to decline, and short sellers are strong, with the contract price being lower than the spot price. The airdrop needs to pay the funding rate to the long positions to curb excessive pessimism in the market.

As a key factor in balancing long and short positions, the funding rate is also a crucial indicator of market sentiment.

Before Boros appeared, traders passively accepted the impact of funding rates on the market, never imagining that one day funding rates could also become an asset that can be traded separately.

So, why did Boros choose the funding rate as the first shot to establish the product's reputation?

High scale, high volatility, and high returns are the fundamental reasons why Pendle believes it has great potential, characteristics unique to the funding rate.

High scale:

The scale of the futures market has far exceeded that of the spot market, and once the futures market operates, the funding rate will be continuously generated.

According to a report by CoinGlass, the total trading volume of perpetual contracts in Q2 2025 will reach $12 trillion, with an average daily trading volume of about $130 billion; according to the settlement rules of most exchanges of 0.01% / 8 hours, the daily funding rate market size easily exceeds tens of millions, and in extreme market conditions, it can even exceed hundreds of millions.

If we can better utilize the massive and stable market of funding rates, it will surely give rise to the next heavyweight financial innovation.

High Volatility:

In the spot market, the significant rise and fall of tokens within a day will quickly become a hot topic, but this is normal in the funding rate market.

For example: According to Coinmarketcap data, on September 8, 2025, MYX Finance (MYX) surged over 168.00%, becoming the top gainer among the top 100 cryptocurrencies by market capitalization, and quickly became a hot topic in the market. However, amid the long-short battle, the funding rate itself is constantly fluctuating, especially for many altcoins, where the fluctuation can reach up to four to five times or even more. For instance, with $TRUMP , some traders even paid an annualized funding rate as high as 20,000% to maintain their long positions.

Taming the volatile beast of funding rates will not only help users formulate better trading strategies but also hide enormous profit opportunities.

High Yield:

The core logic lies in: volatility, a great opportunity to generate profits.

With volatility, there is room for buying low and selling high. A highly volatile funding rate market can also become an important way for users to capture profit opportunities.

How to convert the funding rate into a standardized asset to implement strategies such as trading, profit-making, hedging, and arbitrage is a great test of product design skills.

How does Boros achieve betting on the future rise and fall of capital funding rates?

Entering the Boros page, we can see that Boros has currently launched multiple markets for BTC, ETH, and USDT on Binance and Hyperliquid.

As mentioned above, the funding rate is a key indicator of market sentiment. In other words, if you can accurately perceive market sentiment, you can profit from trading the funding rate of Boros.

So how can this market prediction be converted into tangible profits?

The core of Boros lies in fixing the current funding rate of the market and using it as a benchmark to provide users with a betting method: if the rate rises in the future, those who are bullish will profit; if the rate falls in the future, those who are bearish will profit.

All of this is achieved through YU.

Users can connect their wallets to recharge, deposit collateral, and purchase YU.

YU is a core means of converting funding rates into a standardized asset, representing the entitlement to the yield of the funding rate over a certain period in the future. At the same time, YU is also the smallest trading unit after quantifying the funding rate. Taking “BTCUSDT Binance” as an example, when a user purchases 1 YU BTCUSDT Binance, it represents the yield of the funding rate for a 1 BTC position on Binance BTCUSDT.

We know that profit = income - cost. The profit calculation of YU relies on three core data points: Implied APR, Fixed APR, and Underlying APR.

Buying YU is equivalent to opening a position, which includes two parts of the cost:

On one hand, the Implied APR is the interest rate locked in when opening a position, which can be seen as the price of YU, serving as a fixed annualized rate before maturity. The Implied APR is a benchmark for measuring future changes in market funding rates, representing a fixed annualized funding rate over a period of time in the future.

On the other hand, opening a position requires a fee, which, along with the Implied APR, constitutes the Fixed APR, that is, the cost of opening a position.

Once the costs are clear, the next step is to calculate the revenue.

We fixed a funding rate through YU, while the actual funding rate of external exchanges is represented by the Underlying APR.

When purchasing YU, we have two options to long/short the funding rate:

Purchase Long YU (Long Funding Rate): On the expiration date, users pay Implied APR and earn Underlying APR.

Purchase Short YU (short funding rate): On the expiration date, users pay Underlying APR and earn Implied APR.

At this time, the yield exists in the difference between income and costs, which is the difference between Fixed APR and Underlying APR.

When Fixed APR < Underlying APR, that is, when the market floating rate is higher than the fixed rate, Long YU users profit.

When Fixed APR > Underlying APR, that is, when the market floating rate is higher than the fixed rate, Short YU users earn.

This brings about:

Funding Rate for Long: Buy Long YU

Short Funding Rate: Buy Short YU

In terms of profit settlement, Boros synchronizes its settlement cycle with that of perpetual contract trading platforms.

Taking the currently listed BTCUSDT Binance product as an example: Binance's funding rate is settled every 8 hours, and Boros's BTCUSDT Binance trading pair is also settled every 8 hours.

Every time a settlement occurs, Boros will calculate the difference between the Fixed APR and the Underlying APR for settlement:

When Fixed APR < Underlying APR: Deduct Short YU collateral and distribute the earnings to Long YU users.

When Fixed APR > Underlying APR: Deduct Long YU collateral and distribute the earnings to Short YU users.

We know that YU represents the rights to the revenue of the funding rate for a certain period in the future, and this right is settled every 8 hours (or 1 hour) according to the exchange rules. In other words, the value of YU will decrease with each settlement, and ultimately, after expiration, due to the lack of forecasted funding rate prices, YU will complete its mission and return to zero.

Of course, to leverage greater profit potential, Boros also offers a leverage tool of up to 3 times, allowing users to open larger positions with less collateral. However, high leverage also comes with greater liquidation risks, and users need to regularly monitor their health factor and adjust their collateral in a timely manner to avoid liquidation.

For many who are familiar with Pendle YT rules, it is true that there are many similarities between YT and YU, which can help users deepen their understanding of YU. However, there are also significant differences between the two at their core, and we can establish a clearer understanding through the table below:

From Hedging to Arbitrage: Boros Becomes a Cost-Reduction and Efficiency-Enhancing Tool for Traders

Based on this set of strategies for bullish and bearish funding rates, Boros has sparked spontaneous discussions among contract traders, institutions, and professional Decentralized Finance players since its launch, actively exploring the clever applications of Boros in many real-world scenarios.

The most direct way to participate is to buy YU and bet on the fluctuations of the funding rate.

In the choice between Long YU and Short YU, earn the profit from the difference between fixed interest rates and floating interest rates. On September 12, 2025, Boros launched the Hyperliquid funding rate trading market, which has greater volatility in funding rates compared to Binance, providing users with a stronger fun of betting on price fluctuations.

For long-position holders, the greater utility of Boros lies in hedging the funding rates in a high-volatility environment: by adopting a rate strategy opposite to the CEX perp positions on Boros, one can offset the volatility risk of fluctuating rates, thereby locking the cost/return as a fixed value.

For example, if a user holds a long perpetual position on a CEX and pays a floating fee, while simultaneously buying Long YU on Boros, the floating fee paid on the CEX is offset by the floating fee income from Boros.

On the contrary, users hold short positions in perp on CEX, paying a floating fee, while on Boros, by buying Short YU, the floating fee paid by CEX is offset by the fixed rate income from Boros.

In this way, the risks and costs of contract trading are more controllable, which is very attractive for traders, especially institutional traders. A very intuitive case is Ethena: as one of the representative projects of delta-neutral strategies, Ethena's revenue mainly comes from positive funding rates, so when funding rates fluctuate drastically, Ethena also faces huge revenue uncertainty, which can even affect the project's sustainable development.

Through the Boros protocol's YU, Ethena can lock in fixed rates on-chain, achieving predictable returns, thereby enhancing the protocol's profitability stability and efficiency.

At the same time, the launch of the Hyperliquid market has also unlocked a new way for users to engage in cross-exchange arbitrage:

The essence of arbitrage is the price discrepancy between different markets. Currently, among the two major trading platforms supported by Boros, Binance has more large institutions and adopts an 8-hour settlement cycle with a relatively stable funding rate. In contrast, Hyperliquid has more retail investors, settling every hour, allowing for faster capital turnover and greater volatility in funding rates. This creates more opportunities for cross-exchange arbitrage.

In addition to cross-exchange arbitrage, Boros has launched multiple products with different expiration dates, allowing traders to engage in cross-term arbitrage: if the YU Implied APR of the sooner expiration is lower than that of the later expiration, it indicates that the market expects lower short-term rates and higher long-term rates. Traders can buy the sooner expiration YU and sell the later expiration YU, and vice versa.

Of course, if you are not good at speculating on price fluctuations, you can choose to become an LP:

Boros allows users to deposit funds to become LPs through the Vaults mechanism, providing liquidity for YU trading while earning Swap fees and $PENDLE rewards. Through the Boros Vaults page, we can see that the Vaults APY for BTCUSDT Binance is as high as 60.41%.

However, it is important to note that, due to the mechanism of Boros's Vaults being similar to Uniswap V2, LP positions are essentially a combination of “YU + collateral” and are influenced by the Implied APR. Therefore, becoming an LP is also seen as a slight bullish position on YU. When the Implied APR decreases, users may face the risk of high impermanent loss.

In addition, due to the high attention on Boros, the quotas for Vaults have become more sought after. However, as it moves from soft launch to a development fast track, Boros will gradually increase the quotas for Vaults in the future.

All resources return to Pendle: The recommended program kicks off the next round of rapid growth.

Boros, as a core product in Pendle's roadmap for 2025, plays a key role in the Pendle ecosystem and significantly drives the overall development of Pendle through innovative mechanisms and market expansion.

Pendle aims for the ultimate vision of a “comprehensive integrated yield trading gateway”, and Boros not only continues Pendle's innovation in yield tokenization, but also opens up the funding rate market, which is of high scale and high volatility, for the first time. It converts the funding rate tokens from CEX and DEX into standardized assets YU, expanding Pendle's ecosystem from on-chain DeFi to off-chain CeFi.

In addition, when Boros officially announced the launch of version 1.0, it clearly stated that no new tokens would be issued after Boros goes live, and the revenue generated by the protocol will continuously flow back to $PENDLE and $vePENDLE, further ensuring that $PENDLE will be the ultimate beneficiary of all the value created by Pendle V2 and Boros. Meanwhile, on August 6, 2025, just one week after its release, $PENDLE surged over 40%, verifying the market's recognition of Boros's potential.

Innovations that truly change the game often stem from the rediscovery of those “long-neglected values.” Boros's focus on funding rates has revealed a long-hidden treasure behind the perpetual contract market, which is large in scale yet desperately needs to be tapped.

Currently, the perpetual contract market has over 200 billion USD in daily open contracts and processes over 250 billion USD in daily trading volume. Boros has achieved nearly 1 billion USD in notional trading volume in just two months, with an annualized revenue exceeding 730,000 USD. However, even so, it only accounts for 0.03% of this pie.

In other words, this is a massive market with untapped potential: as the first protocol focused on funding rate trading, the continuous growth of Boros in the future will increase its market share to 3%, which also means a 100-fold growth potential.

In the face of the enormous growth potential presented by this trillion-dollar market, Boros has also launched several core initiatives to embrace future growth.

On one hand, after more than a month of improvement, testing, and observation of trader usage, Boros officially launched Boros 1.0 and announced the initiation of a referral program, marking the transition of Boros from the soft launch phase to the full development phase. After the referral program is launched, new addresses with a nominal trading volume exceeding $100,000 can obtain a referral code. Referrers will receive 20% of the settlement fees generated by the referred users, as well as 20% of the trading fees, while referred users will enjoy a 10% discount on trading fees.

The validity period of each referral code is one year. If the nominal trading volume exceeds 1,000,000,000 USD during this period, the 10% discount will no longer apply.

On the other hand, Boros will continuously optimize and improve its functionalities and products, and in the future will support more assets, more trading platforms, and higher leverage efficiency: currently, Boros supports BTC and ETH, and will gradually include more assets such as SOL and BNB; currently, Boros supports Binance and Hyperliquid, and will support more trading platforms such as Bybit and OKX in the future; in addition, as the market matures, it will support higher leverage to attract more users to achieve higher returns at lower costs. Other additional measures include increasing the OI cap and increasing the treasury limit, among others.

Beyond product optimization, what deserves more attention is the scalable framework of Boros:

In addition to funding rates, the Boros architecture is designed to support any form of yield, including yields from Decentralized Finance protocols, TradFi, as well as assets like bonds, stocks, and other RWAs. This also means that after completing the absorption of the massive market of funding rates, Boros will have the opportunity to expand its layout in more dimensions such as DeFi, CeFi, and TradFi.

This further aligns with Pendle's mission of “Where there are yields, there is Pendle.” As Pendle's flagship product set to launch in 2025, Pendle will further cover the crypto finance and traditional finance markets through Boros in the foreseeable future, and with the deepening advancement of Citadels' compliance PT program, it will rapidly move towards the vision of “a comprehensive integrated yield trading gateway.”

Standing at the starting point of this all-consuming source of profits, with the continuous in-depth development of Boros, we are also witnessing the formation of a super yield platform that covers all types of profits and serves all user groups.