In 2024, the DeFi sector entered a new wave of growth, driving the rise of four major yield-focused narratives: Liquid Restaking Tokens (LRTs), BTCFi, Real-World Assets (RWA), and stablecoins. Pendle successfully captured each trend, generating significant wealth effects for its users. Most recently, during the Usual TGE, early participants in Yield Token (YT) trading realized returns exceeding 10x.
Even as the hype around restaking has cooled, Pendle's underlying market demand remains strong. Since September, its Total Value Locked (TVL) has grown by over 2.5 times from its low, and it continues to lead in the BTCFi and RWA yield sectors.
The recent introduction of Pendle's V3 protocol, Boros, marks its next growth phase. Named from the ancient Greek word meaning "to consume," Boros aims to capture real yield and value from the rapidly expanding on-chain interest rate market. This article explores the new Boros product, its applications, and the potential market opportunities for Pendle participants in 2025.
Pendle's Key On-Chain Metrics
- **$PENDLE Price:** $5.35
- Circulating Market Cap: $868 million
- Total Value Locked (TVL): $5.23 billion
- Recent Monthly Annualized Revenue: $35.58 million
Pendle's growth in 2024 was fueled by the restaking narrative initiated by EigenLayer in the first half, pushing its TVL past $6 billion and the price of $PENDLE near $7. After a mid-year market correction, it caught a new wave of growth in September with the rise of BTCFi, led by projects like Babylon. Each time Babylon opened new staking capacity, Pendle's TVL saw subsequent increases.
Today, Pendle remains the premier platform for leveraged yield farming in the stablecoin sector with assets like $ENA and $USUAL. It continues to launch new BTCFi-related products, enabling traders to gain exposure to airdrop opportunities from热门 projects such as Babylon, Corn, Solv Protocol, Lombard, Bedrock, Karak, and pSTAKE.
Introducing Pendle V3: Boros and Funding Rate Trading
Boros is Pendle's innovative new platform designed for margin-based yield trading. Its initial focus is on one of the most volatile aspects of crypto derivatives: funding rates.
The Problem with Funding Rates in Perpetual Markets
Traditional perpetual contracts use a "Funding Rate" mechanism to balance long and short positions. When long demand outweighs short, longs pay a funding fee to shorts, and vice versa. This mechanism is designed to keep the contract price aligned with the spot market price. However, it introduces a significant risk: funding rate volatility.
For traders, while perpetuals offer a way to hedge against price swings, drastic fluctuations in funding rates can erode profits and amplify losses. For DeFi protocols like Ethena, whose business models are built on capturing these funding rates, this volatility poses an existential threat to sustainable earnings.
The Boros Solution: Hedging Funding Rate Volatility
Boros addresses this core issue by building a "second-layer" perpetual market on top of the existing one. It allows users to trade contracts based on the direction of funding rates themselves, creating a direct mechanism to hedge against or speculate on their volatility.
Boros Use Case: A Example with Ethena
For protocols like Ethena that rely on funding rate arbitrage, Boros provides a critical hedging tool to ensure earnings stability.
Scenario: Assume the current funding rate for ETH is 0.20%, but a market sentiment shift is expected to drive it down to 0.05% within days. In a bull market, this drop could severely impact Ethena's yield generation.
Boros enables Ethena to:
- Lock in Fixed Rates: Ethena could use Boros to lock in the higher 0.20% rate, guaranteeing that level of return even if the market rate falls.
- Hedge Risk: The protocol can protect its core business model from the destabilizing effects of funding rate fluctuations, ensuring long-term sustainability.
Boros also creates a novel "market sentiment trading market." For the first time, traders can directly speculate on the future direction of market sentiment as expressed through funding rates, opening new speculative and hedging opportunities in the on-chain interest rate market.
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Current Pendle Opportunities for Participants
Major Airdrop for $vePENDLE Holders
$vePENDLE holders are set to share an airdrop pool worth over $6.2 million. A snapshot is scheduled for December 31st, 2024, at 23:59 UTC. Rewards will be distributed proportionally based on individual $vePENDLE holder points. This presents a final opportunity for users to lock $PENDLE to qualify for this significant airdrop.
Leveraging YT-USUALx for Enhanced $USUAL Yields
Following the Usual Money TGE, Pendle offers products for its yield-bearing token, $USUALx. Holding $USUAL alone does not capture the protocol's earned value; users must stake to receive $USUALx. A key feature is a 10% fee on unstaking, which is distributed to remaining $USUALx holders, incentivizing long-term holding.
Pendle creates two primary products from $USUALx:
- PT-USUALx (Principal Token): Offers a fixed, guaranteed yield. Currently, 1 $USUALx can be swapped for 1.43 PT-USUALx, redeemable for 1.43 $USUALx at maturity on March 27, 2025. This represents a 43% guaranteed return in three months.
- YT-USUALx (Yield Token): Offers leveraged exposure to the yield. Currently, 1 $USUALx can be swapped for 4.86 YT-USUALx, giving the holder 4.86x the yield-generating power of the underlying asset.
Early YT participants have already seen substantial returns, with $USUALx appreciating significantly since launch.
Partnering with Anzen Finance on Base
The RWA protocol Anzen Finance has launched on Pendle, allowing users to trade the yield of its $sUSDz token. While the current product focuses on high USD-denominated yields rather than a governance token farm, the official team has hinted at a second wave of $ANZ airdrops. Participants should watch for announced point rules to see if YT holders receive a multiplier, making it a potential opportunity.
The PT for $sUSDz currently offers a 19.25% guaranteed return until maturity, translating to a 104% APY.
Introducing Delta-Neutral Stablecoin Project Resolv
Pendle has also integrated with Resolv, a delta-neutral stablecoin protocol backed by Delphi Digital. Similar to Ethena, it employs a hedging strategy but incorporates an RLP insurance mechanism to protect against negative funding rates. Its involvement in the Hyperliquid ecosystem adds to its potential.
Pendle's YT market for Resolv's $wstUSR offers a 30x points multiplier for participants, which will decrease over time. This presents a high-potential airdrop farming opportunity, following the successful precedent set by Ethena and Usual on Pendle.
Frequently Asked Questions (FAQ)
What is Pendle Finance?
Pendle is a decentralized finance protocol that allows users to tokenize and trade future yield. It separates assets into Principal Tokens (PT), which represent the underlying asset's principal value, and Yield Tokens (YT), which represent the right to its future yield.
What is the difference between PT and YT?
PTs offer a fixed, guaranteed return if held to maturity, as they can be redeemed for the underlying asset. YTs are more speculative, providing leveraged exposure to the variable yield generated by the asset, amplifying both gains and losses.
How does the new Boros protocol work?
Boros is Pendle's V3 product focused on margin trading for yield. Its initial application allows users to hedge against or speculate on the volatility of funding rates from perpetual contracts, a previously untapped market in DeFi.
What is $vePENDLE?
$vePENDLE is a vote-escrowed, non-transferable token obtained by locking $PENDLE. It grants holders governance rights, a share of the protocol's revenue, and eligibility for exclusive airdrops from integrated projects.
Is participating in YT markets risky?
Yes, YT trading is inherently risky. Since YTs have an expiration date, if the generated yield does not exceed the cost of the YT itself, the holder can suffer a total loss of their initial capital. It is considered an advanced trading strategy.
How can I stay updated on new Pendle markets?
The best way to stay informed is to follow Pendle's official social media channels and blog, and to regularly check the Pendle app itself for new market launches and point programs.
Conclusion: Pendle's Continuous Growth Trajectory
From the innovative advantages of Boros to the current high-yield opportunities, Pendle consistently positions itself at the forefront of the hottest DeFi narratives. By building the strongest yield products and partnering with top-tier ecosystems and protocols across Bitcoin, Ethereum, Base, and Hyperliquid, Pendle is poised for its next phase of explosive growth. Its ability to capture value across multiple chains and trends makes $PENDLE a key asset to watch in 2025.