Author: Emperor Osmo; Compiler: AididiaoJP, Foresight News

Boros allows you to turn the funding rate of the perpetual contract into an asset that can be bought and sold like a token, completely saying goodbye to the trouble of manual operations every 8 hours. By launching features such as fixed income lock-in, cross-exchange arbitrage, liquidation waterfall strategies, and liquidity vaults, its total trading volume has exceeded $6 billion in just 5 months.

For the Pendle team, launching Boros has been one of the most successful decisions in recent years.

In just 5 months since its launch, Boros's nominal trading volume has exceeded US$6 billion, and its open interest has recently hit a record high of US$268 million.

While @boros_fi's business is soaring in every direction, most in the crypto community still doesn't know exactly what it does.

So, what exactly are Boros?

To put it simply, Boros is a decentralized perpetual contract exchange focusing on interest rate swaps. It first turns the perpetual contract funding rates of major centralized and decentralized exchanges into trading targets.

Boros is architected to support any form of revenue stream, whether it is a DeFi protocol or a CeFi product. Currently, it tokenizes funding rates into a tradable asset called Yield Units.

1 YU = 1 unit of perpetual contract funding rate

For example: YU-ETHUSDT represents the funding rate income corresponding to the nominal principal of 1 ETH, and has different periods such as 25 days, 26 days, etc.

How to trade?

• Go long YU: Bet that funding rates will rise (for example, when the market is bullish, long parties need to pay higher funding rates).

• Short YU: Bet that funding rates will fall (such as in a market crash or bear market).

• Alternatively, settle your YU long or short position directly for profit.

What is the funding rate?

Since the perpetual contract has no expiration date, if there is no funding rate mechanism, its price may deviate significantly from the spot price.

• When the price of the perpetual contract is higher than the spot, the funding rate is positive → longs pay to shorts.

• When the price of the perpetual contract is lower than the spot, the funding rate is negative → short positions pay to long positions.

This is essentially a mechanism that allows the perpetual contract price to closely track the spot price. On most exchanges, settlement usually occurs every 8 hours.

Traditional manual arbitrage method

Buy BTC in the spot market and short an equal amount of BTC on the perpetual contract with 1x leverage.

If BTC rises sharply, your spot part makes money; if BTC plummets, your short contract makes money. The overall position remains basically stable, and you can still earn funding rates.

But here’s the thing: the funding rate is not a stable passive income, it changes every 8 hours.

You may make 20% today and lose 30% tomorrow.

Boros allows you to lock in fixed income or hedge the risk of falling funding rates without manually tracking the market every 8 hours.

Boros’ future plans

Boros aims to develop into a platform that can trade any variable interest rate (e.g. bonds, stocks, and possibly even traditional benchmarks such as LIBOR in the future). It has listed stocks such as NVDA and plans to launch commodities such as gold and silver.

Of course, it still has a long way to go. Currently, Boros’ open interest only accounts for approximately 1.4% of the entire perpetual contract DEX market.

Several strategies for winning steadily on Boros

There are many low-risk ways to make profits that are not discussed much in the community. As a newbie, it can be confusing at first.

1. Follow smart money (copy trading)

An easy way to do this is to follow the experts who have already played the game. You can take advantage of Boros’ built-in bots and its real-time leaderboard feature.

Simply browse the leaderboards to find consistently profitable traders and copy their actions with one click.

For example, @Rightsideonly netted over 40% on his position by copying the strategy of a profitable wallet on the 7-day leaderboard.

https://x.com/boros_fi/status/2016858987233243349?s=46

2. Capture liquidation waterfall opportunities

A "liquidation waterfall" occurs when a large number of long or short positions are forced to be liquidated due to violent market fluctuations.

At this time, the price will seriously deviate from the spot. While longs will receive a negative funding rate (i.e. payment), you can capture this momentary spread by shorting YU without taking on the price risk of the underlying asset.

Essentially, you are purely earning "profit", which is equivalent to making risk-free profits by shorting YU.

You can use advanced tools such as @coinglass_com to discover these opportunities, or follow X platform accounts such as @watcherguru to get market alerts:

https://x.com/pendleintern/status/2015521828643500133?s=46

3. Cross-exchange funding rate arbitrage

This is one of the easiest ways to make money on Boros.

Since each exchange has different liquidity engines and risk models, their funding rates will never be fully synchronized, which creates room for arbitrage.

Example:

• Exchange A: ETH funding rate is +10% annualized (long payment)

• Exchange B: ETH funding rate is +30% annualized (short position charge)

At this point, shorting on exchange B is very attractive (earning 30%), while going long on exchange A is less costly (paying only 10%).

By establishing hedging positions on two exchanges at the same time, you can earn a steady 20% annualized spread while remaining market risk neutral.

Of course, the rates will still fluctuate, the timing of entry is very important, and you need to be cautious when operating.

Want to learn more? Boros has a detailed article:

https://x.com/boros_fi/status/2001831621817962761?s=46

4. People’s Financial Management: Treasury Liquidity Provision

If you don’t even want to trade, Boros also provides a “lay and make money” plan.

Vault LPing (liquidity vault) is the easiest way to participate. There are a variety of vaults on the platform for different assets to deposit into. Some vaults are currently offering annualized returns of up to 50%, which is worth paying attention to.

Advice for newbies

It may be difficult to get started with funding rate trading for the first time.

It is recommended to pay more attention to Boros’ official transaction analysis. If you want to learn the system, their official website has a dedicated tutorial section that will teach you step by step how to understand the operation of the entire system.