Pendle Finance, a decentralized finance (DeFi) protocol known for creating fixed-yield markets, has launched a new product called Boros that lets users trade crypto funding rates on-chain. The platform, now live on Arbitrum, is beginning with BTC/USDT and ETH/USDT funding rates from Binance, with plans to add more pairs and exchanges soon.
As per Pendle, Boros can speculate on or hedge funding rates, which are the fees traders pay or receive when holding perpetual futures. Instead of just paying these fees, users can now trade on whether they believe rates will rise or fall.
A New DeFi Instrument
According to the official announcement, Boros executes trades while using Pendle’s Yield Units (YUs). One YU-ETH, for example, represents the expected yield from 1 ETH worth of funding until a set maturity. This builds on Pendle’s earlier concept of Yield Tokens (YTs), but with a focus on funding rate exposure.
At launch, each pool on Boros will be capped at $10 million open interest, and users can trade with up to 1.2x leverage. These limits will be raised steadily over time as the system proves stable and secure.
Users can go long on a YU if they expect funding rates to increase, or short if they think they will fall. This solution is especially useful for traders who regularly pay funding fees and want to lock in costs ahead of time.
The team also introduced a feature named Boros Vaults. This feature lets users provide liquidity to these markets. Plus, in return, they can earn Pendle rewards, trading fees, and benefit from positive changes in implied APR.
The product’s rollout is phased, with the team focusing on risk management first. Since Boros runs on a new margin system, the developers are closely monitoring the market during its early days.
Pendle’s introduction of Boros shows how DeFi is becoming more advanced, as it is now turning once-technical parts of trading like funding rates into accessible and tradable instruments.
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