Pendle Announces Leveraged Yield Tokenization Platform

Pendle, the pioneering yield tokenization platform, is introducing a new platform supporting leveraged yield trading.

On Nov. 11, Pendle unveiled Boros, a protocol supporting margin trading for tokenized yield. Pendle said the platform will facilitate the trade of “any yield,” including yields derived from off-chain asset classes.

Pendle remains steadfast in our mission of becoming the premier yield-trading platform,”,” Pendle said. “This ambition extends to every yield in the world — DeFi, TradFi, on-chain, off-chain.”

Boros was previously expected to take the form of Pendle’s v3 iteration. Pendle emphasized that Boros’s launch will not usher in the launch of a new token or changes to the tokenomics of PENDLE.

Tokenized funding rates

Pendle said Boros will first set its sights on facilitating the tokenization of funding rates, which it describes as “largely untapped” despite comprising the most fundamental form of yield in crypto.

The project highlighted that crypto perps drive between $150 billion and $200 billion worth of daily trade, with funding rates comprising a key aspect of traders’ strategies. Boros will allow traders to speculate on the fluctuation of funding rates, in addition to entering advanced hedging positions.

“There is currently no reliable way to hedge funding rates at scale,” Pendle said. “The ability to trade funding rates on Boros will empower traders with flexibility and precision that was previously out of reach.”

Pendle also noted that holders of Ethena’s USDe stablecoin, which accrues yield through a combination of funding rates on short positions and Ether staking rewards, will be able to hedge their exposure to funding rates using Boros to achieve a fixed rate of return on their capital.

Pendle rollercoaster

The fixed expiry dates associated with Pendle’s existing yield tokens have lent to significant volatility in the protocol’s total value locked (TVL).

Pendle enjoyed explosive growth in the first half of 2024 as airdrop hunters descended on the burgeoning restaking sector to farm points. With Pendle offering a vehicle for farmers to gain leveraged exposure to points, the protocol’s TVL rocketed to a high of $6.72 billion in June, up 2,775% since the start of the year.

However, with key markets expiring in June, Pendle’s TVL had crashed by more than 50% by the end of July. Since bottoming out at $1.9 billion in early October, Pendle’s TVL has since grown 68% to $3.2 billion.