Boros As A Rates Product: Traction, Go-To-Market, And Risk Controls
Key takeaways
- Pendle identified OTC-style matchmaking as an important go-to-market strategy for Boros and reported roughly $200M+ open interest and $50M–$100M daily trading volume, facilitating large trades by matching counterparties to settle on Boros.
- Pendle plans to allocate 80% of relevant protocol revenue to buyback-and-distribute and 20% for expenses and ecosystem growth, consistent with its prior vePENDLE fee split.
- Pendle observed that boosted yield from vePENDLE has become less important because organic demand and trading activity now often drive pool APY without needing boosts.
- Pendle V2 usage is becoming more institutional, with funds roughly in the $30M to $500M AUM range participating; PT is described as more appealing to bigger funds and YT as more attractive to sophisticated retail/speculators.
- Pendle is interested in broad distribution including Solana and expects more meaningful Solana-related development this year.
Sections
Boros As A Rates Product: Traction, Go-To-Market, And Risk Controls
Boros is described as a funding-rates trading/hedging instrument and is positioned as infrastructure to manage funding volatility (including in equities perps). The corpus provides a snapshot of early traction and an OTC-style matchmaking distribution approach to facilitate large trades. It also highlights risk posture: liquidation events occurred and leverage is being increased cautiously as market behavior is observed and dislocations are arbitraged. The revenue routing from Boros remains explicitly undecided, conditional on stronger product-market fit and revenue health.
- Pendle identified OTC-style matchmaking as an important go-to-market strategy for Boros and reported roughly $200M+ open interest and $50M–$100M daily trading volume, facilitating large trades by matching counterparties to settle on Boros.
- Pendle has not finalized how to utilize Boros-generated revenue and currently reinvests it until Boros demonstrates strong product-market fit and healthy revenue, while stating an intent for Boros revenue to eventually accrue to the PENDLE token.
- Boros has launched funding-rate markets for BTC and ETH, added BNB, and launched an Nvidia equities-perp market with conservative risk parameters as a first experiment; Pendle mentioned potential future plans to add gold markets.
- Pendle believes equities perps will grow significantly this year and views Boros as a tool to mitigate highly volatile equities-perp funding rates that currently deter participation.
- Boros has experienced liquidation events, and Pendle is increasing allowed leverage cautiously based on whether organic orders quickly arbitrage funding-rate dislocations and on increased confidence from observing more market events over time.
- Boros is currently around $200M in open interest and trading activity has recently picked up.
Tokenomics Migration And Revenue-To-Token Buybacks
The corpus describes a shift away from a vote-escrow model toward a staking model, motivated by scaling and participation constraints created by lockups. It also describes a value-accrual change: replacing USDC fee distributions with buyback-and-distribute of the native token, with a stated 80/20 revenue split between user accrual and operating/ecosystem uses. The stated intent is to better translate protocol traction into token demand while preserving governance participation and future incentive flexibility.
- Pendle plans to allocate 80% of relevant protocol revenue to buyback-and-distribute and 20% for expenses and ecosystem growth, consistent with its prior vePENDLE fee split.
- The vePENDLE lock requirement of one week to two years prevented some liquid funds from participating because their mandates disallow such lockups.
- Under sPENDLE, protocol revenue that was previously distributed in USDC will instead be used to buy back PENDLE and distribute it to sPENDLE stakers.
- Pendle’s stated rationale for buybacks is to translate protocol traction into token buy demand, referencing Hyperliquid’s buyback model as a successful precedent.
- Pendle is transitioning its tokenomics from vePENDLE to sPENDLE because the protocol is operating at a larger scale where vePENDLE is no longer the best fit.
- Pendle chose buyback-and-distribute rather than buyback-and-burn to preserve governance participation and future token optionality for incentivizing activity during growth stages.
Unit Economics Reframed: Swap-Fee Dominance And Capital-Efficiency Focus
The corpus asserts that revenue is primarily driven by swap fees rather than TVL-linked revenue sharing, implying that activity and market structure matter more than raw deposits. Pendle describes an operational goal of increasing fees per unit of TVL and notes reliance on limit orders as a driver of activity in performance markets. This cluster signals a metric shift: optimizing for volume/fee generation and TVL efficiency rather than TVL as the primary scorecard.
- Pendle observed that boosted yield from vePENDLE has become less important because organic demand and trading activity now often drive pool APY without needing boosts.
- Pendle’s panel revenue is primarily driven by swap fees rather than revenue share tied to TVL.
- Pendle aims to increase trading activity and TVL efficiency so the same TVL generates more swap fees.
- Pendle performance markets now rely heavily on limit orders to drive trading activity.
- Pendle has additional planned improvements intended to further reduce reliance on TVL as the core performance metric.
Institutional Adoption: Segmentation And Yield-Premium Hurdle
The corpus claims that Pendle V2 usage includes institutional-sized funds and that product fit differs by instrument (PT vs YT). At the same time, it reports limited progress on institution-focused distribution goals, attributing it to compressed yields and an insufficient premium relative to traditional alternatives to justify smart-contract risk. The repeated bottleneck is economic: without a meaningful yield spread, institutional migration is described as unattractive.
- Pendle V2 usage is becoming more institutional, with funds roughly in the $30M to $500M AUM range participating; PT is described as more appealing to bigger funds and YT as more attractive to sophisticated retail/speculators.
- Pendle believes institutions will generally not take smart-contract risk for tokenized yields unless the yield is significantly higher than traditional alternatives.
- Pendle believes the incremental yield premium in DeFi is often about 50 basis points, which is typically insufficient to motivate a move from existing infrastructure.
- Pendle has made limited progress on the institutional/TradFi-focused Citadels objectives because current market conditions and compressed yields make the risk/reward unattractive.
- Pendle evaluated institutional launches involving iUSDe, tokenized private credit funds, and tokenized equities, but could not justify the yield opportunity given current market conditions.
Distribution Strategy And Scope Expansion: Cross-Chain, Solana Interest, And Multi-Yield Roadmap
The corpus reports that cross-chain distribution initiatives have been largely successful and provides peak external distribution magnitudes across major money markets. It also flags interest in Solana distribution with an expectation of more development within the year, though without concrete deliverables. Longer-horizon positioning includes expanding to additional yield sources on v2 and becoming a venue for ecosystems to bootstrap liquidity.
- Pendle is interested in broad distribution including Solana and expects more meaningful Solana-related development this year.
- At peak, PT asset distribution included about $6B TVL on Aave and over $1B on Morpho, and similarly on Euler.
- Pendle says the Citadels distribution strategy has been largely successful, emphasizing cross-chain distribution and broader venue adoption.
- In 2026, Pendle plans to expand beyond stablecoin synthetic-dollar yields into other yield sources such as real assets, nodes, bonds, and equities on v2.
- Over a five-year horizon, Pendle expects v2 to become an important venue for new protocols and ecosystems to bootstrap liquidity.
Watchlist
- Pendle will soon replace vote-based pool emissions with a more algorithmic emissions methodology that sends more incentives to pools with proven trading activity and sustained liquidity deposits, with a small discretionary overlay for strategically important sectors such as RWA.
- Pendle is interested in broad distribution including Solana and expects more meaningful Solana-related development this year.
Unknowns
- What are the precise mechanics of sPENDLE (staking terms, unlock/exit rules, governance rights, reward calculation, and migration process from vePENDLE)?
- What is the concrete implementation timeline for the vePENDLE to sPENDLE transition and for the switch from USDC distribution to buyback-and-distribute?
- How will buybacks be executed operationally (frequency, venues/routers, transparency reporting, and guardrails against adverse market impact)?
- What is the published algorithmic emissions methodology (metrics, weighting, time windows, and how discretionary overlays are decided and limited)?
- After the emissions redesign, does emissions allocation become more correlated with fee generation and sustained liquidity, as intended?