Pendle launches new platform Boros: a new derivatives track targeting the funding rate of perpetual contracts
By Lex, ChainCatcher
On August 6, 2025, the Pendle team, which occupies a leading position in the DeFi yield market, has expanded its business territory into a whole new field. They officially launched a platform called Boros on Arbitrum, with a core function of only one function: to transform the uncertain funding rate in perpetual contracts into a standardized, tradable on-chain asset.
For the perpetual contract market, which often exceeds $100 billion in daily trading volume, the funding rate is a key mechanism for balancing long and short forces, but its high volatility also creates significant risk exposure for traders, market makers, and protocols that rely on hedging strategies such as Ethena.
Boros was born to solve this long-standing pain point, providing a dedicated venue for market participants to hedge or speculate on the future direction of funding rates. This innovative move quickly garnered a response from the market, not only boosting Pendle's total locked value (TVL) to over $8 billion but also rising the price of its native token, $PENDLE.
Boros' Core Mechanism: Domesticating Funding Rates
In perpetual contract trading, the funding rate is a key mechanism for balancing long and short forces, but its high volatility also brings significant risk exposure to traders. Boros' core goal is to provide a solution to this uncertainty.
This is achieved by tokenizing future funding rate yields into Yield Units (YUs). This design is similar to interest rate swaps in traditional finance, allowing both parties to bet on future rate movements:
Long YU: Pay a fixed market-priced Implied APR in exchange for the actual floating funding rate yield in the future. It is suitable for scenarios where the funding rate is expected to rise.
Short YU: Receives a fixed annualized rate while assuming the obligation to pay future floating rates. It is suitable for hedging or betting that the funding rate will fall.
Boros initially supports Binance's BTC-USDT and ETH-USDT perpetual contracts, and will expand to assets such as SOL and BNB, as well as platforms such as Hyperliquid and Bybit in the future. The entire transaction process is completed in the full-chain orderbook on Arbitrum, ensuring transparency and decentralization.
Notable is the capital efficiency offered by Boros. According to official information, the platform supports up to 1000x theoretical capital efficiency, allowing users to hedge funding rate risk for large positions with smaller collateral. This has significant utility value for protocols like Ethena, which implement delta-neutral strategies and manage large asset sizes.
Strategic considerations: Why launch Boros independently?
Pendle's choice to build a standalone platform for Boros rather than iterating on the existing V2 framework reflects its clear strategic planning.
Pendle V2 is designed to handle on-chain native yield, with a mechanism that is more adapted to a relatively predictable yield environment. The funding rate of perpetual contracts is derived from the fierce long-short game within centralized exchanges (CEXs), and its volatility, frequency, and risk characteristics are completely different from on-chain returns.
Starting from scratch, Pendle can:
- Customize risk management: Tailor risk control models and clearing engines for high-frequency, high-volatility funding rate transactions.
- Isolate System Risks: Avoid introducing potential risks of off-chain derivatives directly into the mature V2 ecosystem.
- Build Focused Liquidity: Build independent liquidity pools and market depth around the specific asset of funding rate.
This decision is a key step in Pendle's expansion of its business from "spot yield" to "funding futures", with the aim of building a more comprehensive yield trading ecosystem.
Opportunities and Challenges
Theinitial market response to Boros' launch was strong, with the Position Limit (OI) being quickly filled and raised multiple times, demonstrating the real demand for such a tool.
Its biggest opportunity is that it provides a much-needed hedging tool for the market's large Delta-Neutral strategies, such as Ethena's USDe, to effectively manage systemic risk during periods of negative funding rates.
However, the new mechanism also faces challenges. The first is systemic risk, which relies on oracle price feeding and built-in leverage, which may face the risk of chain liquidation in extreme market conditions. The second is market competition, although Boros is one step ahead in funding rate derivatives, it still needs to face potential competition from mature derivatives platforms such as dYdX and Hyperliquid.
In the future, Boros' success will depend on the robustness of its risk management, the continued growth of liquidity, and the depth of integration with other protocols in the DeFi ecosystem.
Written at the end: New signals for the derivatives market
Thelaunch of Boros can be seen as an important signal for the evolution of the DeFi derivatives market. First, the focus of innovation in the market is shifting from basic perpetual contracts to more refined "second-order derivatives". The deconstruction and repackaging of core elements such as funding rates and volatility are becoming a new frontier.
Secondly, there may be a clearer functional differentiation in the derivatives track. The future market may be composed of a combination of comprehensive platforms that provide one-stop services and specialized platforms that focus on specific risk hedging tools such as Boros.
Finally, the need for new infrastructure is emerging. As funding rate trading matures, tools and services around it for arbitrage, liquidity, and structured products may become the next value growth point in the DeFi ecosystem.
(This article is for reference only and does not constitute any investment advice)
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