Pendle launches the Boros platform, opening a new chapter in Decentralized Finance interest rate infrastructure.

Pendle is expanding its business landscape to the trillion-dollar derivatives market. On August 6, 2025, its new product Boros was launched, achieving on-chain tokenization and hedging of perpetual contract funding rates for the first time, marking a key strategic transformation for Pendle from "yield management protocol" to "DeFi interest rate infrastructure."

In the past year, Pendle has achieved significant growth, with a total locked value of (TVL) surpassing 10 billion USD. The project is no longer limited to splitting existing yields, but is committed to building a complete on-chain yield curve. A data analysis platform has pointed out: "Pendle is becoming the interest rate infrastructure in the DeFi space." The birth of Boros is a key step in achieving this grand goal.

Boros Core Mechanism: The "Interest Rate Derivatives" Market of Funding Rates

Pendle has built the Boros platform on Arbitrum, whose core function is to transform the highly volatile funding rates in perpetual contracts into tradable tokenized instruments — Yield Units (YUs). Each YU represents the right to earn 1 unit of collateral assets (such as BTC/ETH) over a specified period. The mechanism of Boros references the YT (Yield Token) in Pendle V2, and its logic is similar to that of traditional financial interest rate derivatives.

Boros has created a floating-fixed funding rate swap market where users can hedge risks or speculate on the rise and fall of funding rates based on their needs. For users with risk hedging needs, Boros provides effective on-chain tools. Users facing funding rate risks due to spot-perpetual contract basis arbitrage or Delta-Neutral strategies in the perpetual contract market can offset their funding rate exposure on exchanges by paying a fixed rate on Boros and receiving a floating rate, thus earning profits or locking in their maximum holding costs.

At the same time, Boros has created a new trading variety for users with trading demands. Users can predict the future trend of the Intrerest Rate by going long on YU to bet on its rise or going short on YU to bet on its fall, profiting from the fluctuations in the Intrerest Rate. It is worth noting that, within the same time frame, the volatility of the perpetual contract's Intrerest Rate is usually higher than that of its price.

Considering that risk management is a top priority in the early stages, Boros has adopted a prudent risk control strategy, with an open interest (OI) limit of $20 million nominal value and a leverage ratio controlled at 1.4 times.

Addressing Market Pain Points: Injecting Stability and Efficiency into Decentralized Finance

In the crypto market, the trading volume of derivatives far exceeds that of spot trading. Perpetual contracts are the main trading variety, with a current average daily trading scale of about 1 trillion USD. Referring to the structure of traditional financial derivatives markets, the interest rate swap market accounts for the vast majority of trading volume. Perpetual contracts are equivalent to the cornerstone of crypto asset derivatives, and the closely related funding rate derivatives market may become one of the largest emerging markets in the entire Decentralized Finance ecosystem.

However, the high volatility of the funding rate and the lack of effective on-chain hedging tools are long-standing "pain points" in the DeFi derivatives market, which not only increases users' risk exposure but also limits the influx of incremental capital and the stability of DeFi strategies.

The emergence of Boros is particularly important for Delta-Neutral protocols. Such protocols typically rely on interest rates to maintain returns, with a strong demand for stable income and risk hedging. Taking a well-known protocol as an example, it has a TVL of over ten billion, and the stablecoins issued are backed by volatile assets such as BTC, ETH, and LST. To achieve Delta-Neutral conditions, the protocol uses collateral as a spot position and opens short perpetual contract positions on the exchange to hedge against price fluctuations.

Although the protocol maintains a Delta-Neutral position, it still has to bear the funding rate charged by the exchange, which is also one of its revenue sources. When the funding rate is positive (long OI > short OI), the protocol will profit as longs pay funding rates to shorts; however, when the funding rate is negative (short OI > long OI), the protocol will incur losses. At this point, Boros can act as a key "damper" to help mitigate the risks brought by the negative funding rate and smooth the yield curve.

Pendle co-founder and CEO emphasizes: "The daily trading volume of the perpetual contract market reaches hundreds of billions of dollars, yet there has never been a scalable, permissionless on-chain way to hedge or trade interest rates. Boros will change that." This infrastructure-level supplement may attract more incremental funds.

Value Proposition: Empowering Ecological Win-Win

Boros was released on August 6, and $PENDLE surged over 40% within the week, with prices approaching $6. The strong upward trend also validates the market's recognition of its potential.

Boros will enhance the value capture ability of $PENDLE, with 80% of the fees generated by the protocol being allocated to vePENDLE holders, thereby consolidating vePENDLE's position as the core value capture module of the ecosystem. The accumulation of fees from Boros to vePENDLE will create a powerful positive feedback loop. An increase in the usage of Boros can bring more fees to vePENDLE, which will further incentivize more $PENDLE locking, thereby strengthening the incentive effect.

Boros has opened a dedicated Vault for LPs, who can earn returns by providing liquidity to the funding rate swap market. The sources of income include $PENDLE emission incentives, trading fees, and favorable changes in the implied annualized interest rate, among others.

Future Vision: A Revenue Layer Throughout On-Chain Finance

Boros initially opened the funding rate market for BTC and ETH perpetual contracts on a certain trading platform, and plans to gradually expand to more mainstream perpetual contract platforms and high liquidity assets (such as SOL, BNB) in the future. A well-known market maker has stated that they are providing liquidity for Boros.

In principle, Boros can be integrated into the entire Decentralized Finance ecosystem, becoming a core Interest Rate module, which means it is not only an independent DApp but also a highly composable "LEGO block" that can be seamlessly called by other protocols.

At the same time, Boros's underlying architecture design has a high degree of scalability, which may unlock more types of variable income sources. In addition to the income within DeFi protocols, it can also integrate: 1) centralized finance income products, such as structured products from centralized exchanges; 2) traditional finance income tools: such as stocks, government bonds, money market and mortgage Intrerest Rate; 3) real-world assets: including tokenized credit and private debt.

Boros provides the feasibility for most forms of yield streams to become tradable financial instruments and collateral, pushing Decentralized Finance towards a more complete on-chain Intrerest Rate market, enhancing capital efficiency, and paving the way for risk-controlled leveraged strategies. In the long term, Boros can not only develop into the yield layer of DeFi but also potentially evolve into the yield layer of a broader tokenized financial ecosystem. When DeFi is capable of replicating the core Intrerest Rate market of traditional finance, a true paradigm shift is imminent.