The world of cryptocurrency continues its dynamic evolution, with perpetual contracts, or “perps,” taking center stage in the decentralized finance (DeFi) conversation. As the final week of the year unfolds, the sector is abuzz with the long-awaited launch of Lighter’s LIT token, a significant milestone in the fierce race for dominance in the perps market. While the headlines are dominated by Lighter’s performance and market implications, a deeper look reveals overlooked beneficiaries and shifting trends, particularly in protocols like Pendle’s Boros. In this comprehensive analysis, we delve into market performance, the implications of LIT’s launch, the rise of Pendle’s Boros, and what these developments mean for the DeFi landscape as the industry enters a new phase of growth and competition.
Crypto Markets Enter the Year-End With Mixed Sentiment
As 2025 draws to a close, global markets have displayed a cautious tone. Bitcoin saw a modest pullback of -0.81%, underperforming compared to leading US equity indices such as the Nasdaq (-0.59%) and the S&P 500 (-0.39%). The enthusiasm that propelled tech stocks to record highs in the previous week seems to have waned, with investors reassessing risk as markets wind down.
Outside of crypto, the precious metals sector experienced notable volatility, with gold retreating sharply by -4.04% following weeks of strong performance. Much of the decline can be attributed to profit-taking, as investors cashed in on recent gains.
In contrast, the perps sector of crypto stood out as the lone bright spot. The Perps index advanced by 1.3%, largely driven by surging activity around HYPE and anticipation for Lighter’s token generation event (TGE). The momentum in perps underscores a critical trend: decentralized derivatives are becoming an increasingly vital component of digital asset trading.
Lighter’s LIT Token Launch: Redefining the Perps Race
The introduction of the LIT token by Lighter marks a watershed moment in the ongoing struggle for supremacy among decentralized perps exchanges. In recent months, competition has intensified, with exchanges vying for traders and liquidity by touting features like verifiable execution, zero retail fees, and substantial incentives for participation.
Lighter stands out for its ability to attract significant trading activity through transparent operations and a fee-free structure for retail traders. In the preceding 30-day period, Lighter led the perps market with over $200 billion in trading volume, outpacing key competitors such as Aster ($172 billion) and Hyperliquid ($161 billion). These figures speak not only to the platform’s popularity but also to the growing appetite for decentralized, non-custodial trading venues as investors seek alternatives to centralized exchanges (CEXs).
What differentiates Hyperliquid in this mix is its lack of active trading incentives, yet the platform remains a clear revenue leader, generating approximately $47 million during the same period. This phenomenon raises a crucial question: Can Lighter’s impressive trading volumes be sustained after its TGE, or are they predominantly fueled by short-term incentives like points farming?
The Lighter team seems committed to sustainable value creation, announcing that all value derived from Lighter’s products and services will directly accrue to LIT token holders. Furthermore, Lighter Labs, the entity behind the protocol, plans to operate at cost, signaling an ethos centered on community and user benefits. In practice, LIT’s tokenomics allot 50% of the total supply to ecosystem initiatives, and the remaining 50% to team members and investors. Notably, a quarter of the total supply will be airdropped to participants in Seasons 1 and 2, directly rewarding early supporters.
Upon launch, LIT debuted with a circulating market capitalization of $695 million and a fully diluted valuation (FDV) of $2.8 billion. With $8.76 million in protocol revenue generated over the past month ($105 million annualized), the token trades at a price/sales (P/S) multiple of roughly 7x, and an FDV/Sales multiple of around 27x. These numbers reflect high expectations but also intense scrutiny over whether Lighter’s volume and revenue growth can persist now that its incentive structure is shifting.
Pendle’s Boros: Quiet Beneficiary of Perps Market Growth
As analysts and traders debate who will ultimately capture the lion’s share of perps trading—primarily between Lighter and Hyperliquid—some of the most exciting opportunities may exist beneath the surface. One protocol quietly poised to benefit from the explosion in perps trading is Pendle, particularly through its Boros primitive.
Pendle launched Boros in August 2025, introducing a new on-chain financial primitive: interest rate swaps. In essence, Boros operates similarly to a perps exchange, but instead of speculating on the price of assets, it enables users to bet on yield movements. Additionally, rather than being perpetual in nature, Boros markets are defined by clear maturity dates, creating a unique structure akin to the bond market, but tailored to DeFi.
The early months since Boros’ launch have witnessed robust growth in open interest (OI). On December 26, OI peaked at $245 million as eight markets representing $177 million in value reached maturity and expired. This cyclical pattern in OI mirrors dynamics in Pendle’s main v2 product, reflecting predictable surges around market maturity and subsequent redemptions.
Understanding Boros: How On-Chain Interest Rate Swaps Operate
Central to Boros’ design is the Yield Unit (YU), a derivative token representing the future yield of an underlying asset until maturity. For those familiar with Pendle’s v2 markets, YU functions similarly to the Yield Token (YT), but with a focus on interest rate speculation.
Participants on Boros can take two principal positions:
- Long YU: Traders in this role pay a set, fixed interest rate while receiving floating returns based on the real-world funding rate of the underlying asset (for example, BTCUSDC provides funding based on Hyperliquid’s settlement rates). If the funding rate exceeds the fixed rate, the trader profits upon market maturity or position closure.
- Short YU: Here, traders pay the floating, underlying APR in return for receiving a fixed APR, predetermined at the inception of the trade. Profits are realized if the actual funding rate underperforms the fixed rate.
Boros aligns its settlement intervals with those of the underlying perpetual market venues—hourly for Hyperliquid and every eight hours for Binance, for instance. This keeps pricing and funding mechanisms in sync with established trading infrastructure while offering DeFi users access to sophisticated interest rate hedging strategies typically reserved for institutional traders in traditional finance.
Metrics and Revenue: The Boros Growth Trajectory
Boros’s impact has been notable not just in terms of open interest, but also in trading activity and protocol revenue. Since its launch, Boros has facilitated over $6.8 billion in cumulative notional trading volume, averaging approximately $1.5 billion per month over the past four months. Current OI sits close to $88 million, after natural cycles of market maturity and redemption.
The protocol’s revenue is generated from two primary sources: a variable swap fee (applied as a percentage above implied APR during each trade) and a flat OI fee that constitutes 0.2% of the fixed APR for each yield unit at settlement. Liquidation fees remain minimal, totaling only around $1,300 since inception. Cumulative revenue currently stands at about $300,000, averaging $67,000 monthly over the recent quarter—a promising return given Boros’ relatively short operational history.
Expanding Venue and Asset Coverage: Strategic Advantages
Initially, Boros launched with BTCUSDT and ETHUSDT perps markets on Binance, but the protocol has since diversified its offerings to integrate with Hyperliquid, OKX, and newly popular assets like HYPE. The competitive share among venue partners is becoming increasingly balanced, with open interest on December 29 distributed as follows: Binance (37%), Hyperliquid (35%), and OKX (29%).
In terms of underlying asset focus, the ETH-USD market maintains a leading position by OI, closely followed by BTC-USD and the newer HYPE-USD pairs. This diversification underscores Boros’ flexibility and adaptability—by not being locked into a single venue or asset, Boros can rapidly adjust to shifts in trader preferences and market opportunities.
The Broader Bull Case: Boros as a Catalytic DeFi Primitive
Boros’s value proposition grows stronger as the adoption of perps becomes more widespread throughout DeFi. As more advanced participants and institutional investors enter the space, demand intensifies for strategies such as hedging funding rates, offsetting yield receivables, and executing sophisticated cash-and-carry trades. Boros meets these needs by allowing exposure and risk management across multiple venues and assets.
The potential for Boros extends beyond the current crypto landscape; as DeFi continues encroaching on traditional finance territory and regulatory clarity improves, it’s plausible that interest rate derivatives could expand to include tokenized real-world assets (RWA) such as equities and commodities. In such a scenario, market participants could trade yield units tied to leading stocks, precious metals, or even government bonds—all on-chain, 24/7, permissionlessly.
Currently, Boros constitutes less than 5% of Pendle v2’s revenue, but its trajectory points to it becoming a major or even dominant growth vector. With continued protocol development and the expanding universe of tradable on-chain and RWA assets, Boros could become DeFi’s default destination for decentralized interest rate swaps and funding rate derivatives.
Conclusion: Perpetual Evolution in the DeFi Arena
As the year wraps up, the launch of Lighter’s LIT token and the growing ecosystem around perps trading serve as reminders of how rapidly decentralized finance is maturing. While platforms like Lighter and Hyperliquid battle for headline volume and new user bases, quietly innovative protocols such as Pendle’s Boros are developing the next wave of financial tools, enabling sophisticated risk management and yield strategies that parallel and even surpass their traditional counterparts.
The continued proliferation of perps markets, alongside the parallel development of derivatives platforms, positions DeFi for another transformative cycle. As regulatory frameworks solidify and institutional interest grows, expect platforms that blend flexibility, transparency, and innovation to become foundational pillars in the financial systems of tomorrow.
