$PENDLE The team has newly launched @boros_fi, officially debuting on 08/06~
Boros is a DeFi protocol built on Arbitrum, also targeting the interest rate derivatives market, but compared to its own Pendle, Boros mainly focuses on trading 'funding rates' for perpetual contracts, transforming floating 'funding rates' into income units 'YU', and providing YU for market trading, allowing institutions or traders to conduct leveraged trading or hedge against funding rate fluctuations based on their needs.
Boros's products are mainly composed of two parts:
Trading Interest Rate (YU trading)
Long YU
Willing to offer the counterparty (short YU side) a fixed rate based on the current market interest rate, in order to profit from the future increase in market funding rates, which brings about interest spread earnings. Essentially, the long YU side is optimistic about the rise of funding rates and market sentiment.
Short YU
Willing to lock in the funding rate at the current market interest rate and transfer additional volatility gains/losses to the counterparty (long YU side). Essentially, the short YU side is bearish on funding rates, bearish on market sentiment, or a neutral income strategy that wants to lock in interest income to reduce volatility risk.
Liquidity Provision (Vaults)
Similar to Pendle's LP position, mainly providing liquidity as a counterparty for traders, earning trading fees and $PENDLE token incentives. However, unlike Pendle LP, LPs holding until maturity almost do not bear impermanent loss, but Boros Vaults carry the risk of impermanent loss, mainly because the underlying logic of Boros Vaults is to go long YU. Therefore, when future market interest rates remain below the market interest rate at the time you deposited into the Vaults, the Vaults will incur interest spread losses.
[So what does this mean for us?]
If you want to fix the funding rate when making contracts, this can be used. It can also be used in neutral strategy arbitrage, and even during buying low/selling high or selling high/buying low based on market sentiment. Later, Beier will further introduce Boros's related products and help everyone understand how each strategy operates and how to execute them.
