Pendle and Boros: Shaping the Future of Yield Trading | TN, Pendle

Transcript

Quick shout out to today's sponsor, Katana. We'll hear more about Katana's 1 billion cat campaign later today, but for now, let's get into the episode. Nothing said on Xerox Research is a recommendation to buy or sell securities or tokens. This podcast is forformational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Pokio, Ryan, and our guests may hold positions in the company's funds or projects discussed. Hey guys, welcome back to another episode of Ox Research. Today we're joined by a special guest.

We've got TN, co-founder of Pendle, alongside some of my friends here at Blockworks, Shauna Deans, Carlos, and Luke from the research team. How you guys all doing today? >> We good. Yeah, been been uh feeling pretty hyped about the Boros Mulch in the last couple of days. So, pretty good. >> Definitely love to hear that. And uh I know we had to work through the the time zone differences here. Uh it's late for TN. It's early for most of the rest of us uh here on the Blockber side. But uh I guess if you want to just jump into it for us, Ten, like maybe give some quick background on yourself. Um and then on Pendle before we kind of dive into, you

know, all things Pendle and Boros. Uh that'd be a great starting point. So go for it. >> Yeah, thanks for having me. So IT one of the co-founders and CEO of Pendle. Pendle we we are um rates protocol. So at this point in time we have two products. One's V2. V2 is conventionally known as the product that enables the tokenization and the trading of yield. So it popularized yield trading, points trading and we work very closely with protocols like Aida um layer and then the the other LRT stable coin projects and then more recently just last week we also launched

Boros which is um also a yield trading protocol but with margin. So the first use case for Boros is the trading of funding rates specifically BTC and USD uh sorry BTC and ETH markets on Binance. Um so that's that's a couple of days old and I think we'll we'll probably spend more time talking about the product. >> Awesome. I guess maybe just kick things off with um the recent Boros launch like curious from your POV um how that launch has been uh just in terms of you know the initial kind of activity um you know more or less than you expected um have you felt that it's a su success so far what's the the general feeling there

so I want to say it went better than we initially thought so when we started out again because this is the first iteration of the product and it's a zero to one product meaning that there hasn't been any kind of precedence before the launch and we we've spent some time constructing educational materials but we we were relatively conservative when it comes to estimates. So we thought we started out with $10 million of open interest cap for each of the two markets. So in total we were expecting like sorry we we allocated $20 billion

of cap uh open interest for for for boros expecting that it might take one week to fill but after one day I think we more or less got up to speed and we had to raise the the cap fairly shortly after. So at this point in time, 5 days in, we are facil like we we've seen 27 north of $27 million of open interest. Sometimes it goes higher, sometimes it goes lower because there are trades uh it all trading activity has been fairly healthy as well. If just uh we're starting with 1.2x leverage and then over the I think

on Saturday we increase it to 1.4 4x. Even with that amount of leverage, the trading activity has been fairly healthy. At this point in time, I believe it has already passed $19 million no show volume. So, it's it's it's gotten better than we expect them. Uh, having that said, I think there's still a lot more to do because like we have features that we have planned out that we think can improve the UI UX and those will be rolled out over time. So Ten, I'm I'm curious like what APIs or metrics do you need to see hit uh in order to inform increases in the OI caps or leverage caps and ultimately like how

high do you think these OI caps can scale to eventually? So I think over time in say the the as as we get comfortable with the product right there shouldn't be a cap by right but now we're starting with a cap mainly because we are not too focused on growth we are making sure that the product is safe and sound first and foremost before we want to scale up now. So at this point in time, it's hard to pinpoint exactly uh specific amount in in KPI terms for us to to increase a cap. It's more the case of looking at a couple of things.

Firstly, we want to make sure that the liquidity is sufficiently deepened that there's good amount of like spective liquidity and that when there's very aggressive market movements, there are people or like whether individuals or or like institutional traders coming in to to to make the market efficient again capitalize on some of these um opportunities. So, so that's that's one aspect, right? That's from the liquidity perspective. Secondly, it's also from the perspective of risk management.

We are dealing with liquidation system for the first time in the history of Pendle because V2 would never have to deal with that. Everything is like a spot trading of yield. But with with margin system in place, then risk management becomes a very different kind of consideration. So we need to make sure that our risk system is robust enough to handle very volatile swings like for example if if implied rates move from 7% at the moment and then suddenly adjusts 10 times to 70%. In a very short span of time we need to make sure that our risk system can capture that and then delever average accordingly otherwise we might run into bet that situation and that's no good

for anybody. So until we feel comfortable with the risk system that we have in place, we will continue to operate with low margin sorry low leverage. And then over time as we go through more and more of these very volatile swings, we and we should naturally have more data points and then once we see that our risk system is sufficiently resilient, then we can increase the leverage. Now until we come to that we will just focus on safety security and then once we cross that tipping point I believe we can do things and scale up more aggressively like increasing the cap uh until there's no need for a cap

and that the leverage can also be adjusted upward because now we're very modest 1.4 four times 1.5 soon, >> but it's like I would like to see the platform supporting maybe 20x to 50x kind of kind of um like leverage for for great trading. >> Does does this logic also apply to adding like new exchanges, new assets like new maturities or like are you looking for others in that case? Um I think with with markets to some extent yes.

Now the reason why we start with just just for some context, right? The reason why we start with BTC USDT and ETHUSDT is because these two collectively when with with the open interest combined across the exchanges it's it's probably closer to the total TBL of DeFi and we think that just focusing on BTC at each markets for a start proves to be a sufficiently big addressable market for us to work with. If we want to add more markets further down, we will. Um, but we need to also make sure that their liquidity, the trading activity on various exchanges like Binance, buy

hybrid liquid it is healthy. Otherwise, there could be manipulation risk. We don't know how reliable the oracle uh could be. Um yeah if if especially if the liquidity uh on a specific value is very very thick then it could subject to suff manipulation. So yeah I I think for for adding markets uh adding leverage like the considerations will alter a little bit but I think the core principle of focus on liquidity and then our internal risk management should remain quite consistent across our evaluation of all these different segments.

So it's quite early still um and you know only 1.4 1.5x leverage soon but have you seen any liquidation volume yet on the initial roll out? >> Well at this moment not yet um I think yeah with one 1.4x most people are still handling uh depositing small amount and they're playing trading quite quite quite uh positively. Um I suspect if we raise it to two three we should probably start seeing some liquidation.

>> And you also said you wanted you wanted to make sure you know liquidity is sufficient and deep for for traders in order to scale. So I'm curious like what that process was like getting either uh market makers or traders onboarded to be ready to you know use Boro day one and you know at least checking the numbers this morning is looks like it's doing 20 million in volume a day. So yeah curious what that process was like with getting people onboarded.

>> Yeah, it's actually a fairly long process. I would maybe break it out into different types of users and then their respective processes. So here on the one hand we wanted to onboard market makers and then the other group of users would be the sophisticated retail. So they don't belong to any entity but they have very deep appreciation for derivatives. They know yield trading well. They have views on rates. With respect to the first group the lock bankers these are the likes of say winter mute gsr they big markets they have exposure across many many different types of

products and instruments in in C5 and D5 so there are effectively two phases first is once we have an idea of how boros would look like and what the use cases would be we spend a good amount of time I would say like the first couple of months of the year reaching out to these funds and then gave them very like we we gave them very consistent updates on our development progress. The goal here is to onboard at least one market maker who is willing to take a chance with us to start Boros when it is still a work in progress. So that was the goal. So we reached out to many many different market makers, pitch them the

idea. Many of them were fairly onboarded with the idea but having them to become the day one user was quite a bit of an ask. So eventually we got lucky we found a willing partner in Kaledan and then that's then we move on to phase two. Now that we have Kaladan on board as a day one market maker, we needed to all we needed to make sure a couple of things. Firstly, we have the proper documentation that Kaledan could work with so that they they can they can trade effectively. They can make markets effectively. So that's that's one aspect and it's towards the the the larger BS

we also need to work with these uh sorry calendar specifically to do stress testing. So stretching the like simulated environments to to the extremes. For example, if we have like 100x leverage, what would happen? Uh can their system take over quickly quick enough and and then uh or or do they run the risk of liquidation? Yeah, things like that, right? So all these things I think collectively must have taken at least six to seven months of work. Um so that's that's more on the market making side but now that we have a use case in place already with mark uh with with

Taladan we have also started reaching out to other market makers to pitch the prospect and vision of borrow also with the with with the with the with the hope of onboarding them as potential users and market makers. Now switching to the other side uh with respect to the sophisticated users, we actually started Boros um beta access in April. So we've had like three phases of beta accesses guarded once prior to the launch of Boros last week. We started the first round with internal team members in late March, early April. So that was very very small and fine. And then the second

stage was about two to two weeks after we opened it up to community users. So some of the more active community users on pendle those who have very very good ideas of pedal v2 they started trading oros at the very early phase and then they gave us feedback. So by the time the product actually went live last week, there was a fair amount of users who already knew what Boros constitutes. And then I think sometime in June, we also we became more liberal with uh the the product access. So we started inviting a lot of KS some funds, friendly fans to try out the product and then they gave us feedback. Most of them just wanted to get a sense of how the

product looks like and then read the materials. So yeah, so that was again from from late March until effectively last week. So about five months of work. That's right. Uh four four four four four plus months. Um yeah. So so when we launched properly last week, we didn't really start from zero. We had some support, foundational support already. >> This episode is sponsored by Katana and their 1 billion CAT campaign is live. Katana is a DeFi first chain built for deep liquidity and real yield by redirecting chain revenue back to active DeFi users. Bridge and deposit directly into vaults in one simple click and start earning immediately on your Ether, Bitcoin, USDC, and more. Follow the link in today's show notes to get started. As

always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. I'm curious um in terms of you know maybe feedback you've gotten from funds or even early users like planning to use boros to either hedge or just trade interest rates like have they done you know have they made use of strategies or other sort of if it's products or kind of like doing their own custom management to hedge interest rates historically like what feedback you've gotten from them around how Boros kind of fixes or solves pain points or um how it differentiates itself kind of within this within within this market.

>> Yeah. So when we presented the idea to like some of these funds, I think the general the general feedback was that like they it would they would find the product useful. Uh but then again like liquidity has has always been like a big consideration um on on whether they use the product or not. So prior to launch, prior to boros, I don't think there's a very efficient market if they were to if if they wanted to hedge rates. They could technically hedge using like doing an OTC. So finding a counterpart, finding a broker and then

they set a deal uh they spoke once, right? So that that that has always been the case but we don't know uh the size of the market. We also am not too we're not too sure how efficient it is because pricing would be very opaque in that case. They could also consider futures but I would think the capital efficiency might not necessarily be the best. Uh and then in terms of volume there might also be a constraint. So that that is my speculation. Prior to the launch of Boros, historically maybe there just hasn't been too many avenues for funds to hedge their beta explosion.

With respect to the launch of Boros, I think a lot of funds find the utility of Boros fairly immediately. They they they could use Boros to to hedge the funding rate exposure. um some have been the payer, some have been the recipient. Both of them could use borrows. They lock in the amount they paid if they long or they lock in the all they receive if they short. So, um I think right now given the scale and size of crypto across the board, there are sufficient use cases that could utilize Boros for their specific needs.

Like speaking of this players, one of the biggest like players that could use hedging like this is Athena like because they are exposed to like positive funding rates and whatnot. Do you think we'll see liquidity large enough for them to use this product like at scale? Well, I actually think Boros is a very very complimentary product to Athena. So my impression of how it could utilize it is to lock in the funding rate because conventionally they've they've they've been they have long spot short per position that subjects them to funding rate exposure and with boros they could use a little bit more of their uh sorry

use some some uh some assets as collateral and then short the rates so that they can lock in the the the funding rate in an attractive rate and the blended yield becomes more resilient so that they are they are less susceptible to the volatility of funding rates regardless of the market environment and I think with that in place the offerings of Athena the SUSD APY would become more attractive so if you recall maybe back in the mid year like May June period when the market was fairly inactive SUSD rate wasn't exactly the best now it's good now it's back back to back to the attractive rate again but at that

point in time it was maybe 3% 4%. Yeah. So so I think if Boros had been around earlier and they lock in the funding rate at um desire desired level of 9 10% APY um I think I think a blended would be more resilient. So that that is how I think we could work very closely with the DAP to offer a very very Brazil product to to users. >> I wonder if there would be any other way to like integrate Boros with front ends like for example Hyperlid where users can directly go long but at the same time hedge their funding rates. Are

there any plans for that? >> Well, I would love for that to happen. Um but I think this is probably more discussions with with the respective products. So I hope I hope one day I hope uh not too long from now we prove we can prove out we can prove to to to everyone in the community that like Boros is a serious product and it's got it serves a use case and yeah for users want to lock in rates the ideal way is for them to do it directly on the platform that they're familiar with which which would be the the centralized exchanges or or hyper liquids >> on the point about hyperlquid. So like right now um we have just two markets

from Binance listed on Boros and uh Binance update its funding rates every 8 hours whereas hyperlquid updates and settles um I think once every 1 hour. So I'm curious how the frequency of funding rate impacts um the the capital efficiency on Boros and like whether or not higher frequency of funding rate updates can I guess like improve the capital efficiency or like pricing precision on Boros.

>> Yeah. So funding in turtle should not affect the capital efficiency because because the yeah if the I think the capital efficiency has has a lot more to do with uh the rates and the durations. Uh the frequency of settlement does not does not matter in this cons uh particular consideration. what it matters uh sorry what's more important uh with respect to funding interval is just how frequent the thing settles and how frequent you get

feedback so between binance and hyperlquid because binance um settles every eight hours whereas hyperlquid settles every one hour like if you're a trader you get feedback much more frequently if you were to trade a market a hyperlquid market right so it's uh versus Binance which happens three times a day for example so let's say you short a position on Binance today you will only see the settlement maybe eight hours later versus if it's on Hyperlid you short right now in an hour you know whether you're in the money or not and then you can keep going so the I think the

intensity of trading is probably higher more exciting on hyper hyperlid markets versus binets. >> That's super interesting. My understanding that is that boros is today deployed on arbitrum. Um for a hyperlquid integration would it be beneficial to deploy on the hypervm? >> No. So um the way Boros is con uh is is set up is that it would it can support any grades that are um like published by by Oracle. So as long as the Oracle supports it like there can be a market on Boros. So this

also means that we don't necessarily have to confine to like crypto C5 D5 rates in the hopefully near future we can also extend the product to to to non-crypto rates. So maybe something like LBO rates for example and then the trading can take place on Boros. I think it's interesting to think about how Boros is complimentary to the existing strategies run and one thing that I can think of when you say we can go beyond just per funding rate is almost improving the current strategies for example uh a USDC you think about the PTYT model it's really effective for going long the variable yield because

you can buy the YT token on leverage but to go long the fixed yield with the PT it's not that capital efficient so I'm wondering could you use a similar model that Boros uses for AUSDC and take the A oracle published interest rate and then just exchange the payments as the price on the exchange. >> Well, technically I think so. Yes. >> Yeah. So if the oracle supports if the oracle supports and provided that there's good amount of liquidity uh based on like judging judging by demand I think yeah I think I I think uh there could be a market for it.

>> Interesting. I think there's going to be a lot of use cases coming out like when people test it out and uh see what's going to be done. >> Yeah. Yeah. There's a lot more that we can do but we need to lay out the groundwork first and that expand to all this very interesting and creative use cases further down. So I as we think about um scaling and growth for Boros, I guess let's just first assume um we're in a world where uh like production's looking great, there's deep liquidity, no occurrence of bad debt. Like what would be the primary uh growth vectors you'd expect to pursue first? whether it's, you know, more

exchange listings, more maturities, more uh assets. And um I'm particularly interested in like if you do pursue uh off-chain rates like um Liebore or Fed funds um like at what point in time like could we expect to see that on Boros? >> Yeah. So assuming that we are comfortable with this the the risk system and we see very good growth healthy liquidity then I think the natural extension for us would have to be to support more markets from single single exchange let's say in this

case we already have Binance markets that the next growth consideration for us would be what other types of markets of Binance can we support so maybe Solana maybe Hype the list goes on, right? And then after that, then it would be the other exchanges because every exchange accounts for funding rates differently. Even though it could be BTC USBT on Binance and BTC USDT, same underlying on on buy bit, OKX, they have maybe slight variability across all the different venues. So every every exchange we support we need to study them in uh intensively and then

making sure that we account for the differences. The ultimate aim here is to allow for rates of the same kind of underlying across the board to be arked and eventually they should converge. Right? Right now, if you look at um BTC funding rates on on Binance, they could sometimes defer greatly from the other venues like buy or hyperlquid, but with borrows in place and hopefully if we make the rates market efficient, the rates should be very competitive and they should eventually converge. Um yeah, and of course along the way, I think that the leverage adjustment is also very very essential. we we we

started to think about the construct of Boros because of the premise around capital efficiency. So just for a context as to why we derive Boros uh from V2, we we we notice a couple of uh shortcomings and limitations with the V2 construct. Now don't get me wrong, V2 is essential. It has a very important use case at enabling points and certain types of yield to be traded but it is not exactly the most capital efficient in its construct. So let's say if we want to treat ST the because ST yield fluctuates very very modestly in the range of say 3% and

4%. you need a very big amount of underlying in order to make meaningful amount of return from the very small sweep frees. So when we supported SD ETH markets we saw good amount of liquidity but it was very difficult for us to scale up and that was when it occurred to us for rates that are being reverting and fluctuate in a very small band we need uh we need we need leverage. So that was kind of the backstory for for how we came about Boros. Um yeah so so with respect to Boros like leverage has been a core part of it. It's just that right now we want to increase it over time and and it's

hard to say exactly how many times leverage will kept at maybe it's 50 maybe it's 100. I'm not too sure. Um but we have a very strong intention of making boros a very very capital efficient product for traders and yeah so >> good good >> we'll we'll come to a a number at some point it's just that now it's a bit premature to to give give that that that that cap.

Yeah, I think it makes sense. Inevitably, you want to give um some outlet for the folks to gain, you know, greater exposure there. Um I'm curious when you went through sort of like the natural uh expansion of the product through different markets. Um maturities was not one on your list there. Is there um specific thinking behind like why adding additional maturities to like the BTC markets for example would be meaningful at this point or or not meaningful or too difficult etc. I think it's not so meaningful at this point but it will become essential. It's not so meaningful because we're just starting out. We

don't want to have too many different maturities that could fragment the liquidity because every maturity is a different market. So we want to just focus our attention on September pool and we make it such that it it it is the same as the quarterly futures on Binance so that if user sees opportunities and quarterly futures that they can move over or the other way around. So the the the AR opportunity should be very very obvious between oros and quarterly features and but but I think over time as we sense that the community becomes more used to the product then we can naturally add

more maturities uh longer dated ones for different types of use cases. I I would think that the longer dated ones would probably be more relevant for hedgers, then the short ones are probably more relevant for speculations. But yeah, the these are just our initial thoughts. We want to get through maybe the first couple of weeks, see how it goes, and then we plan out the subsequent moves. Shout out to today's sponsor, Katana. Katana is a DeFi first chain built for deep liquidity and high yield. No empty emissions, just real yield and sequencer fees routed back to DeFi users.

Incubated by Polygon Labs and GSR, Katana is launching with notable ecosystem primitives, assets, and partners like Morpho Chain Link and more. Katana's 1 billion CAT campaign is live. Bridge and deposit directly into vaults in one simple click and start earning immediately on your Ether, Bitcoin, USDC, and more. Follow the link in today's show notes to get started. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. Um, one thing we haven't touched on is uh, Boros also offers these um, vault products for uh, passive liquidity provision. So I'm curious um, if you could talk us through how these are architected and the benefits they

provide liquidity providers. >> Yeah, so the the benefit is actually um, pretty straightforward. It allows it is I think of it more like a a vault that automatically automatically places orders on behalf of users so that you don't have to manage your positions too actively like you can just deposit funds and then trust that the vault will do its job and then you just sit back and earn some amount of APMY. it is one of the three items that we have in place to ensure initial liquidity. So just just just for um for context right when we thought

about the product prior to the launch we wanted to make sure that the product has a good amount of liquidity on day one. So we engaged Taladan which I touched on briefly and then we also developed a very very basic market making bot that serves as the backup in case the market maker um does not does not operate uh as as intended. Then we have like a backup liquidity layer and then the vault also functions as a another backup. So the vault as as it is right now has proven to be quite popular. It has uh when we raise

cap it just gets filled in minutes to to date it has about $225,000 worth of liquidity generating about 50% in APY. Now the construct of it is actually fairly simple. We're starting with a UNI V2 uh kind of setup that basically um takes in assets and then allows the trading across a very wide spectrum of of rings. So this is very different from a V3 and V4 kind of design where the concentrated liquidity is a big part of of the the proposition.

Right here we wanted to have like a more spread out rates spectrum so that whether the rates go up to like 50% or goes down to negative 50% there will still be liquidity to trade against. It's just that the the the the price might be pretty pretty like pretty bad. Um but here again because it's the first iteration we want to start with something simple gather data points and then improve on it. So yeah, so far it's it's working as it headed.

The APY is also fairly attractive and healthy, but we also want to caution users that because it's like a V2, it's it's a it's it's largely inspired by a V2 setup, right? There will be a permanent loss. So yeah, users would have to take note of that. Is the um vault product something that could theoretically be listed on a Pendle V2 market um for users to speculate on what that APY looks like? >> Maybe further doubt um if there's a LP token potentially.

>> I guess another followup would be um right now like playing around with the UI. I I get quoted different fees for whether it's a a maker or a taker. So I'm curious like what the current monetization parameters are and where you would expect like the blended take rate on volume to fall um between maker and taker flow. >> Yeah. So for for boros there two uh revenue streams. uh one is from the swap fees but in this case maker this dot maker fee is 0%. And then taker is um five bits. So

it's hard to it's it's it's really hard to project in volume. Um but yeah it like because it's five bits right it will scale with volume. The other the other revenue stream is the settlement fee. So with respect to settlement fee, pedal pedal charges 0.2%. Um for both the long and short links. So what this means is if there's um 400 million uh like let's say like there's $400 million open interest just just arbitrarily speaking, right? Then the the the revenue for petal would be 0.2%.

uh times two because the the long and short legs will have to will have to uh pay this and on on the $400 million notional volume. So that would be another um another revenue stream. So put it simply right it's actually very similar to pedal v2 kind of um re revenue structure. There's the YT base fee which is very similar to the OI structure that I just described because Pendle charges 5% of the yield that gets tokenized on Pendle, right? Like as an example, if ST generates 5% in APY, then 5% of that 5% yield will will be pedal revenue.

Then the other the other the other revenue stream for penalty 2 is the swap fee. So when there's like trading activity, pedal takes a portion of it. So in the same way that that's taker fee for boros >> on on pendle v2 like over time higher portion of the revenue has come from that take rate from the do you foresee the same thing happening in the case you just described with boros >> I think it's possible. I think it's possible. It depends on I don't know like I I think it's possible but I am not sure the likelihood of it at this point in time I would say like 50/50 like maybe it gets

treated very very aggressively that maybe swap fee becomes a major contributor of the revenue but nevertheless like we think it's important to have multiple sources of revenue streams so that we can we can we have a bit more leverage to see how we and best adjust the product to benefit the the value add to both the protocol and to the users. >> Awesome. I would love to like just move away from Boros for a bit and speak about like Pandora 2. Um you've seen a lot of growth this past few months or weeks like particularly with the growth of SUSD and that utilization of Pendle.

I'm curious on your thoughts on like this synergy between Athena Fendle and recently like with Abbe like it seems to me to be one of the most um relevant like narratives or like traction stories taking place in DeFi today. Yeah, I I I think this is really one of the major breakthroughs for V2 for for for for for us for V2. This has been in the works for quite a while actually as I speak right now.

We started conversations with Aina and a probably I want to say September October last year just to get them started seating the idea and get them comfortable with the the whole setup. So, A has become a very important distribution venue for PTS and because PT is now listed on the core instance of A then it becomes a lot more recognized and people feel more confident in holding PT. So, it all it is very very net beneficial to like the Pendle, Athena and A communities I think. Yeah. So, just to

give a bit more context, right? Like the reason why it is a big deal to us is because of the amount of work that that gets invested in making this happen. Aside from just the business development work, we also had to invest in risk curators to make sure that the solutions that we propose would fit the the the requirements and then once that gets in a way accepted then it has to also subject to a governance proposal. Once that's done and that someone has to has to build it and see liquidity or all of that but it became a very meaningful ad when PT U SUSD first got listed and it

became the fastest uh the the market that that that got $1 billion in TDL uh in the shortest time to my knowledge that's about one week. So immediately I think one week after SUSDP got listed on a it took about one week to get to $1 billion in TL u and then subsequently we added more markets and yeah now now there's a little over like two $2 and a half billion dollars of um like PT assets on on Athena sorry on on a uh and that strategy gets replicated much more aggressively across other different venues today.

>> Yeah, I was doing governance at the time and I was keeping up to date with the proposals to add the PT and it's a huge amount of effort just thinking about how to price those assets, right? It's a huge pull and those listings were very successful and I'm wondering if now going forward because PTUSD did so well is there maybe a path forward for other assets to be listed other PTs rather than only SUSD? I think it definitely couldn't stop with SUSD but with a there's always the liquidity requirements. Now we are not sure what would be the threshold but it wouldn't be insignificant.

So other assets if they want their pts to be listed on a they probably have to have maybe a couple hundred million dollars in underlying TVL and then the pts also have to be successful $150 million in TVL before it it will get considered as a collateral on a so again I don't know the the concrete figures but it's not going to be insignificant >> and one thing we've seen recently is you know a lot of Pendle TVL sometimes it's it's concentrated in a hot maturity that you know ultimately comes into expiration and with maturity like that TVL can roll off the books but um July

31st we saw um a huge maturity in the billions and I believe protocol only saw around 200 million in outflows before making a new all-time high and liquidity. So, I'm curious if you think like the A PT listing like particularly now for the September maturity if that's improved the the durability or the stickiness of Pendle's underlying liquidity. >> Yeah, I think it's it's definitely a big part of it. But also, this is I want to say yeah, we're we're uh we've been operating maturities for some time now.

So we we've learned from our previous uh maturity events on how to prepare for some of these major maturity events. So to your point, I think having the new maturities uh sorry having a in place is is very essential. Um yeah, because the looping strategy actually creates a lot of incentives for users to participate. And usually with USD pool um the the the most recent one when it when it gets lifted the the cap got lifted it got filled up very very instantly.

So the incentive was there to attract new participants. Then what we did on our site is also like for for major pools we try to provide more alternatives for users to roll their assets to. So let's say if you have SUSD now we always want to make sure that there are new maturities to capture these liquidity so that if you want to continue to hold SUSD if it matures in September you can at least roll into November and then stay on with the panel pool for a while before you consider if you want to move somewhere else. And then the good thing with the Athena ecosystem is that like with USD you're not just confined to SUSD you

also have the alternatives in EUSD TUSD and then strata couple of other new protocols that are taking in USD as as deposit asset. So if you're if you're not too comfortable with whatever SUSD is paying, you can always consider these other alternatives. And similarly, because now bulk of our TBL is in a form of stable coins because they're all denominated effectively like US dollar, right? So the interchangeability becomes a lot more seamless.

You can jump from USDS to USDE quite seamlessly because these are assets with deep liquidity and they're all very consistent in denomination. So yeah, if USDS offers you better rate, you can you can hop over quite seamlessly on handle. Yeah. So I think these are things that we have in place that provides user better experience when when they reach the maturity event and as much as possible we wanted to stay with Pendle. So yeah, the the UIUX improvement and then the range of yields that we offer across a broader range of assets, I think that also helps >> and we've se frequently seen, you know,

Pendle pursue new deployments on uh like different EVM instances and whatnot. So we've seen a lot of success out of the gate with the Hyper EVM deployment. I think over 320 million in liquidity right now. Um but then you know we also have Converge coming up um with the Pendle deployment and we've seen historically like tremendous success with all of the Athena's instruments listed on Pendle. So yeah, I'm curious where you're seeing with the Hyper EVM deployment, but then also your thoughts on um how successful the converge instance might be.

So yeah, I think Hyper EVM has has been a very nice uh launch for us. Um you pointed out 300 million and TVL. I think we to be honest I think it exceeded my expectation. Um not that I not that I don't think Hyper EVM is good, it's just that the Hyper EVM is fairly new. Um but the community is is very active and like the yeah hype holders are are are very involved in in growing the community and because of our involvement there. We've seen firsthand

how important it is to work with the right group of partners and then from there get the right type of publicity. Um so so that's like I think a learning there with respect to converge. I I I believe like it can be very successful. I'm not too sure the launch date of the chain. Um but we've already worked with most of the important protocols that are scheduled to launch or converge and we're bootstrapping the liquidity for most of the important ones. I think yeah with the traction that we've seen so far converge should do reasonably well.

>> Um zooming out like and just thinking about the Pendle token I'm just curious like from your perspective if you could launch Pendle again today and redesign the tokconomics would you still choose the V model that Pendle has today? >> That's a very tough question. The short answer is maybe not. Um I think if I can I I I think like if we can do things um again maybe we'll just keep it simple. Um but the fact is like e pendle hasn't been exactly a bad implementation.

It it it's just that there's additional work for users who want to benefit from the revenue distribution. voting becomes essential otherwise holding the token does not guarantee you any kind of yield. Um so yeah that's that but but I think in the near term because we have so many other things that are going on and like let's say V2 we have a very we have a very packed pipeline that we need to ship with Boros. We still need to find a product market fit. We'll probably come to revisit the tokconomics um slightly later after we're sorted with with the products.

>> Makes sense. Well, I think uh we I think we might be through all the questions from our end or just the general flow here. Uh Ten, it was great having you on to talk all things Boros and then Pendle of course as well. Um maybe just to kind of roll out the red carpet for you before we close things off. Um I I guess what are you looking forward to kind of over the next few months? Um what do you what do you have your eyes set on if it's just focusing on Boros and the growth there? Um just keen to get your thoughts before we close things out. >> Yeah, I want to say like for for us it's it's always Pendle first, right? And Pendle now has two products. V2 has its own road map and Boros has its own road map as well. We're not compromising on

any of these products. In fact, the way we the the team is structured is to have team members uh allocated to the respecting pro products with very little overlap. So maybe only at the management level where we will involve in two two of these products but by and large most of the team members should only be focused singularly on either V2 or So I look forward to having institutional instance for B2. Uh this is part of the citadel that we announced. I look forward to having bridge PTS crosschain stuff. So those are very I think very important

deliverables that that we should expect for V2 in the next for for the remainder of the year. Now coming to Oros because it's a new product we are we are like like I mentioned like we are focusing a lot more on the safety and security aspect making sure that the foundation is set up properly before we scale up and then assuming that we're able to scale up uh on the funding rate side support more exchanges and more types of markets then the next category of rates that we and potentially support would be the QoS rates like uh ETH staking yield, sola staking yield. And

then the next category before we even touch rates could potentially be borrowing rates on money markets or even exchanges. Yeah. So, so these are growth potential for boros and these are multi-billion dollar aggressible market there. There's a lot of room for us to to wiggle around and there to navigate. Uh but the most important thing right now is to make sure the product is safe and secure and then we need to find a product market fit and then we scale accordingly.

>> Love it. Well, it's been great to see um you know only a week or so out from the Boros launch the you know relative level of excitement there. So we'll definitely be keeping our eyes out watching um the growth to come. But uh as I mentioned, great to have you on. Uh appreciate you walking through all things Boros and Pendle of course with us. You you guys have your eyes on all of these things at once. Um and for all the listeners out there, thanks for tuning in. Sean, Carlos, Luke, of course, thanks for joining in and uh asking some very uh meaningful questions. And we will see you guys next time. Appreciate having you on, Tiana.