A Boros Special Feature, Real Estate Backed Tokens, and ERC-8183
PLUS: Pendle's Road to DeFi Domination
Welcome to Edition 162 of The Castle Chronicle!
Gm all!
Welcome to the newest edition of the Chronicle!
You’ll get a curated list of the most important macro news and DeFi news, along with insightful posts from guests and more! Actionable intel done the Castle way 🤝
Without further ado, let’s get into it, shall we?
In The Markets
The Iran War is continuing, oil has exploded, and then imploded after Trump tried his famous TACO strategy. In his own words, “The Iran War will end very soon”.
While the markets reacted favourably to that statement, it’s hard to imagine Iran giving up so easily. This feels like one of his walkbacks, the calm before the storm, if you will.
This still has the potential to backfire on markets, specifically if Iran continues to hold out and oil rises. Luckily for us, crypto seems to be a bit more resilient right now than equities.
Crypto’s disastrous few months of price action seem to be mostly behind us, as the 60k floor has been defended fairly heavily. Obviously, anything can change, and we could lose that floor just as easily, but the hope is that maybe we stay mostly flat until the conflict is behind us.
All eyes have been on the Middle East and will likely remain so until resolution, so the best thing for us to do is keep researching the projects that best align with crypto’s future and take advantage of any war-influenced dips.
But until that happens, let’s dive into the rest of the newsletter to see what went on this past week!
Crypto Round-Up
Pendle’s Road to DeFi Domination
Pendle has long been one of crypto’s best DeFi applications, and each year it becomes more useful. This past week, Pendle announced a new roadmap for 2026, adding a good amount of new features to the protocol.
Think of all those underutilised stablecoins sitting on CEXs, barely earning 3% yield. Now imagine what that would look like if Pendle gave those holders direct access to Pendle fixed-yield strategies from their home CEX.
Well, you don’t have to imagine anymore, because that is exactly what has happened.
That’s a lot of excess capital that can be absorbed into the Pendle ecosystem if it plays out the way they want it to.
Looping Pendle PTs has also been one of DeFi’s greatest strategies, so it’s no surprise that Pendle wants to lower the barrier to entry here. This new one-click leverage feature makes it much easier for users to leverage their PTs and earn a great yield.
Speaking of PTs, Pendle says, “You want to buy PTs on any chain from any chain? We got you.” Being able to buy and loop PTs from anywhere is highly powerful and drives significant demand for all users.
Pendle has brought a lot to the table with this roadmap, and there are even more tools that we didn’t cover.
If you want to see the full announcement, go here:
ERC-8183: The Commerce Layer for AI Agents
Agentic commerce is one of the major narratives driving crypto, as there is potential for millions of agents to transact on crypto rails in the near future.
To do this requires a fully permissionless commercial environment where agents can purchase or offer services anywhere.
This is why Virtuals and the Ethereum Foundation have come together and created ERC-8183 - an open permissionless standard for agentic commerce applications. These applications will also include escrow and evaluator attestation in the smart contracts.
This makes transactions and commerce between agents trustless, no more worrying about whether or not money is being sent without guarantees.
ERC-8183 is defined by the Job. The Job comprises 3 parties: the Client, the Provider, and the Evaluator.
The Client creates the job with a Provider and puts the payment into escrow > The Provider does the work and puts the job completion onchain > The Evaluator reviews the submission and either calls it complete or rejects it.
Some examples of various jobs that could be built are:
Service jobs like content generation, code review, and data analysis
Fund transfer jobs like yield farming, token swaps, and portfolio rebalancing
Reputation-gated jobs that enforce stricter terms on unproven agents, as well as blocking low-reputation providers
This is a huge task and super important for the future of crypto x AI. To read more about this, check out Virtuals’ article below:
Castle’s Special Guest feat: Boros Finance
Trade Here To Win This Bear Market - A Comprehensive Boros Overview
Boros is a sister protocol of Pendle V2, taking its unique yield-trading mechanism and bringing it to the world of funding rates.
While trading funding rates is still nascent in crypto, we believe we’re building one of the best places to trade in this bear market.
In this guest article, we’ll cover:
How Boros works - Yield Units, funding rates, getting fixed funding on perps and farming funding rate differences
Why you should use Boros: possible speculative gains, insurance against funding rate spikes, and the unique edge you have as a participant in the bear market
Finding ideal trading setups on Boros
How to start trading on Boros today, based on your experience and risk tolerance with crypto
Funding Rates: An Unexplored World in DeFi
Perpetuals trading has become THE breakout product of crypto in the last cycle. Protocols like @hyperliquidX achieved huge Product-Market-Fit, and perpetuals trading volume now outpaces spot trading by magnitudes:
Even in bear markets, perpetuals continue to lead spot volume by multiples!
But within the perpetuals market lies billions of untapped yield via funding rates.
Put simply, funding rates are what longs/shorts pay to each other, depending on the difference between perp/spot prices:
Depending on whether there are more longs/shorts, rates either swing highly positive (longs pay shorts) or highly negative (shorts pay longs) during market volatility.
This floating funding rate has led to new yield farming strategies emerging, such as:
Cash/carry trade to capture positive funding rates (i.e. short ETH perp to collect funding / hold ETH spot to make the position delta neutral)
Cross-platform funding rate arbitrage to capture funding rate differences (e.g. long ETH on exchange A, short ETH on exchange B - your yield is the spread between the two platforms)
However, as funding rates are never static, these trades might not be suitable for retail participants to execute.
But with Boros: we’re bringing fixed yield into funding rates, opening up these strategies to the average crypto participant.
Fixed Yield via Yield Units (YU) - The Heart of Boros
With Boros, you can now capture the yield of funding rates with our Yield Unit (YU) markets. One YU represents the 1:1 funding of the same asset on perps:
1 YU of ETHUSDT-Binance = 1 ETHUSDT funding on Binance perpetuals
With Boros markets, YUs have both Implied APR and Underlying APR.
Implied APR:
Think of this as the price you pay to purchase YUs on Boros
Your Implied APR entry is the fixed APR you pay/receive until you exit the YU position
If you long YUs, you pay the Implied APR
If you short YUs, you receive the Implied APR (perfect for cash/carry trades!)
Underlying APR:
This is the floating funding rate of the YU’s perp market
If you hold a long position, you receive the Underlying APR
If you hold a short position, you pay the Underlying APR
There are 2 ways to make money directly from YUs on Boros:
Implied APR gains (mark-to-market)
You’ve longed BTCUSDC-Hyperliquid rates at 8% Implied APR, and close at 10% - your position is up 25% from the increase in price! (vice versa for shorting)
Underlying APR gains (settlements over time)
As YUs represent the funding of perpetual markets, you either pay/receive the Underlying APR, depending on your Implied APR entry + whether you’re long or short.
This time-based element can be tricky to understand, so here’s an in-depth thread for further reading:
You can also consult our Boros docs for more details if needed: https://pendle.gitbook.io/boros/the-basics/chapter-2-implied-apr-and-underlying-apr)
Getting Fixed Funding with YUs:
With YUs, you can now lock in fixed rates for perpetuals positions. Simply long/short YUs 1:1 to your notional perp amount, and your Implied APR entry is the funding rate you’re paying until you unwind the position!
Achieving fixed funding on longs:
Achieving fixed funding on shorts:
Why use Boros?
Boros is inherently PVE because we’ve created an arena where traders don’t need to “win” on Boros to be profitable.
For example:
Trader A believes that Implied APR for ETHUSDT-Binance at 7% is undervalued, opens a long to speculate on the price increasing before the market matures
Implied APR then spikes to 14%
Trader B wants to capture the fixed 14% APR, and shorts ETH rates at 14% Implied while shorting ETH on Binance for fixed rates, while Trader A exits his longs
End result: Trader A profits from Implied APR increasing, while Trader B gets a high entry for fixed yield on an ETH cash/carry trade.
Both participants win!
For a deeper dive on this:
How to start using Boros
There are two main ways to use Boros:
Trade Boros markets as a speculator
This means betting on the movement of Implied/Underlying APR in markets.
For example, traders who longed XAUUSDT-Binance funding rates before the US-Iran escalations were able to capture huge upside on both Implied APR price and Underlying APR settlements:
It’s as simple as being a directional trader. Think rates are undervalued and are going to increase due to a market catalyst or uptrend? Long rates on Boros. Think rates are overly high, and due to correct? Short rates on Boros.
Catalysts that push spot/perp price dislocations, such as mass liquidations of shorts/longs, are also events that can be captured with Boros:
Trade Boros markets as a yield farmer/hedger
This means using Boros to enable fixed funding, and/or to capture spreads between perp platforms simultaneously.
You can use it to lock in high Implied APRs for cash/carry trades, or arbitrage funding rates between platforms for delta-neutral fixed yield.
We’ve even launched a Boros Strategy Dashboard that makes it easy for you to spot funding rate arbitrage opportunities when they appear:
These yield strategies can go up to 23.8% during periods of volatility, and can go even higher with leverage (adjusted to personal risk tolerance)
And we’re regularly highlighting trading opportunities and the movement of funding rates on our official X account, so make sure to follow us there @boros_fi!
And to see how several traders have done well on Boros, here are several case studies:
Trading to a 73% ROI in 30 days:
Making 5 figs from Boros with one trade:
From 11k to 117k on Boros:
Now the best way to start trading on Boros… is to open up a trade and to see what happens!
Don’t let the complexity of funding rates scare you. Figure out the strategy you want to try out, deposit into Boros, and open a small trade to see what happens.
From a distance, Boros might seem overwhelming and too complex to learn - but once you’ve got the first trade open, it’ll start clicking into place.
Start trading on Boros today: https://boros.pendle.finance/strategy
In The Know
Virtuals has long been the protocol championing AI, and recently also robotics. They recently announced this hackathon with Base for any builders looking to leverage embodied AI. This is the next logical step for AI Agents, giving them a body to perform physical activities instead of being siloed to digital work. This will be something to watch going forward, as companies that come out of this hackathon might be a good chance to invest in something at the ground floor.
Another chain bites the bullet and creates its own enshrined stablecoin. But this time, instead of using Ethena (like the other chains that made this decision), Sonic went a different route and chose Frax as its infra layer of choice. Enshrined stables just make sense from a chain perspective, but it remains to be seen if Sonic can do anything with it and get back the users they have lost over the past few months.
RAAC has launched another backed coin, this time backed by real estate assets rather than gold, like pmUSD. This new token, iREET, provides exposure to onchain real estate with real rental income as cash flow. We’ve seen real estate being tokenised before, and it doesn’t always end up well. But that being said, this is what RWA is supposed to be, so here’s to hoping they’ve found the sauce to make it succeed.
That’s it for another edition of the Chronicle! Every week brings new opportunities, so don’t fret!
We’re all gonna make it eventually!
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In our newsletter, we may discuss projects or tokens in which we hold positions. While we aim to provide informative content, our views are not financial advice. Please conduct your research and consult professionals before making investment decisions. Crypto markets are volatile, and past performance doesn't guarantee future results. Invest responsibly, and be aware of the risks. Your capital is at risk, and we do not accept liability for any losses.