Pendle’s Boros Announces Cross-Venue Funding-Rate Spread Markets

Pendle’s Boros announced Spread Markets on Thursday, Oct. 15, giving traders a single position on differences between perpetual-futures funding rates for Bitcoin and Ether across platforms.

The Boros Bitcoin and Ether spread markets track the gap between funding rates on two venues. Perpetual-futures funding rates are payments between traders with opposing positions, and they can differ for the same asset across platforms.

A Boros position exchanges a fixed rate for a floating one. Its result depends on whether the average realized funding-rate spread is above or below the implied annualized rate when the trader enters. A long spread position benefits if the average gap exceeds that entry rate; a short benefits if it falls below. Going long does not simply collect both venues’ funding payments.

A fixed-return strategy combines three positions: short a perpetual future on the venue with the higher funding rate, take an equal-sized long on the lower-rate venue, and short the corresponding Boros spread. The two futures positions are intended to offset asset-price exposure, while the Boros position converts the changing funding-rate gap into a fixed-rate position.

A strategy’s realized return depends on the rate at entry, holding period, leverage and trading costs.

The spread can change as market sentiment and trader positioning shift. A gap that favors a position can narrow, widen or turn negative, changing the settlement outcome.

The strategy also carries liquidity, settlement and liquidation risks on Boros and the underlying venues. If a venue is disrupted or liquidity dries up, a trader may be unable to adjust one side of the combination in time. Hedging the asset-price exposure does not guarantee that it is fully offset in extreme conditions.

Capacity is limited by the spread itself: when more traders enter similar positions, their activity can narrow the gap and reduce the return available to later entrants.