In Onchain Finance, every yield stream becomes a building block. Today, Pendle Boros, a new primitive that takes the floating financing speed over eternal futures-introduced one of the most volatile but essential flows of crypto and it turns it into a tokenized instrument that can be traded, covered or, perhaps, even posted as collateral.
Initially available for Binance ETH and BTC-Persps, Boros makes a market possible for Fixed-VS-Floating Financing Rates Swaps, making a new way to praise and cover prices. In essence, it is the establishment of a derivatives layer of the financing speed that can connect in Defi.
As the Boros team explains: “Traders who are exposed to financing percentages can cover their exposure to financing on BOROS by determining the amount of the financing percentage they pay.”
A trader lung ETH -Perps but wary of rising financing can, for example, buy return units (YU) on Boros, whereby a fixed rate is paid to receive the floating leg – so that the maximum cost costs lock. Conversely, a stablecoin protocol such as Ethena, which is structurally short perps to harvest financing, can sell YU to receive fixed payments in advance.
Complementary to Ethena
As soon as Boros spreads to other exchanges where Ethena covers its place for a long time, Boros must offer sufficient benefits:
- Swap floating for fixed – Ethena can open a short YU position to convert volatile financing flows into a stable coupon. This makes better spare planning possible, reduces the catartered risk through the financing of crashes and even enables Ethena to be reserved in advance with trust team that the marketing team will love.
- Post yu as collateral -While yieldstones (yus) have no fixed cash flows or settle on the underlying Pendle-PTS, they represent tokenized financing change positions with a clearly defined adulthood and appreciated with Oracle. This structure makes them a candidate for future use as collateral in money markets. In that scenario, traders or protocols could post yu as collateral to borrow Stablecoins, so that they can retain the exposure to financing without setting the directional coverings.
- Price certainty for Protocol Treasuries Treaturies can now “lock” the yield side of their Delta-neutral transactions, which means that variable PNL is converted into predictable income. In the course of time this can yield more conservative capital, especially if protocols set fixed yields to end users. Founder TN Lee expects Boros to eventually harmonize the markets for financing percentages, which are quite variable today:
“Boros allows it [arbitrage] From financing percentages between exchanges, making the result of rates, “Lee told Blockworks.
However, the utility continues. As the Boros team writes: “In addition to the obvious usefulness to cash and wear traders, the engineers we bring to life open a new vertical for all assets with proceeds, regardless of whether they are on-chain or off.” The model can extend to the expansion, real credit or even borrowing/borrow rates-in principle everything for which an oracle-verifiable yield source is.
To support this new interest layer, Boros will open special safes that earn reimbursements and stimulates incentives by offering liquidity to fixed/floating financing interest rates. These safes mirror the V2 -Pools from Pendle, so that LPS can take the other side of the directional hedging -and earn part of the cost current of the new market.
Everything
Boros is not the only project traces that convert yielding positions into a “outstandable” collateral. The upcoming upgrade of the Exponents from Notal takes a strikingly similar Tack: “tokenizes new yield strategies that are specifically designed for livered Yield users” and then let those tokens are promised on deep-liquidity loans such as Morpho.
The Headline innovation of Exponent, Smart Redemption, has a vault holder repay a deployed assets (eg Susde for Usde) without first pulling the collateral out of the credit market, so that free outputs and crucial are made, making returns to locks or thin second-second liquidity.
Functional wrapping the two designs rhyme: both boros and fictional exponent wrapping a variable cash flow in a token whose value can be reliable by Onchain Oracles and followed into maturity, giving risk motors a clear path to bleach it as collateral. Although the market value of a YU simply expires in the direction of zero at the expiry, the predictable Oracle feed and the well -known payment window still leave it with confidence markets.
The result is the same flywheel of capital efficiency: users can use the income flow that serves their debt, while money markets get a diversified pool of an “income backed” collateral that is less correlated to spot swings. Together, Boros and Exponent point to a Defi-seecue where revenue principles are the core building blocks of credit, shrinking inactive capital and the path to livered, but due to risk-managed strategies over the pile.
It is important that Boros does not launch new token. Instead, 80% of his reimbursements to VepenDle holders will be built up, as a result of which Pendle’s model of rewarding long-term strikers will be continued. At the same time, the emissions of the pendulum will be used to start Boros vaults. That is also a potential source of sales pressure, but one that probably goes back in Vependle slots as the proceeds increase. The basic principles of token benefit from the added cost current without unnecessary dilution – a design choice that deserves credit, especially at a time when many founders choose to spin products with one or more new tokens.
Pass
Yet the launch is not without complexity. Boros is “starts from 0”, the team admits, with its own risk motor and vault logic.
“As a new platform that is being built to stand next to Pendle V2,” the team notes, “Risk Management will be our most important focus in the first phases – especially in the beginning when new mechanics and market dynamics are experimented.”
Under that dynamic: a new type of feedback loop of price volatility. Nowadays, a sudden peak of 1,000 assembling in financing can force traders to relax spot-perp base, just to stop bleeding creating a cascade of liquidations and market stress. But with Boros, those players can cover the financing leg without closing directoral exposure. If the liquidity is deep, YU markets can work as an interest rate Swaps in Tradfi: damping volatility and compressing extreme financing prints.
