Variable yield refers to an annual percentage yield that fluctuates over time, typically in response to changing market conditions, supply and demand for assets, or protocol parameters. In decentralized finance, lending platforms and liquidity pools often offer variable yields, meaning the returns on deposited digital assets are not fixed. While potentially offering higher returns during periods of high demand, variable yields also carry the risk of reduced earnings when market conditions shift. This contrasts with fixed-rate offerings.
Context
Variable yields are a common feature in decentralized finance lending and liquidity provision, reflecting the dynamic nature of digital asset markets. News often reports on significant changes in variable yields across different protocols, influencing investor strategies and capital allocation decisions. Participants must continuously monitor these fluctuating rates and assess the associated risks, such as impermanent loss in liquidity pools, to manage their positions effectively.
Boros tokenizes perpetual funding rates into YUs, creating a capital-efficient hedging primitive that structurally expands the yield-trading total addressable market.
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