Vaults

Each YU pair on Boros has a corresponding vault, which provides an additional source of liquidity on top of the order book. When a trader places a market order, it can be matched with either the order book or the vault—effectively making the vault a counterparty to open positions, earning fees and PENDLE incentives.

Boros' vault mechanism is advanced and is out of scope for most users. For those curious to dive deeper, you can read our whitepaper [here] (<link coming soon>).

Risks

Boros vaults behave similarly to a Uniswap V2 LP position of “long YU” and “collateral”. This means vault depositors are effectively taking a long-biased position on YU, which benefits from high or rising implied APRs.

However, if the implied APR declines after you have deposited, your vault position may suffer impermanent loss (IL) —especially if it was opened at a high APR level.

Before depositing, consider the current implied APR. A high implied APR may result in a high historical vault performance, but could also make your entry more vulnerable to drawdowns and IL.

Yields

Vaults generate returns through:

• PENDLE incentives

• Swap fees from market order flow

• Favorable Implied APR movements, which increase the value of your vault position.

Opening a Boros vault position is similar in risk profile to going long YU. If the implied APR drops after you enter, you may experience impermanent loss, which will be realized when you exit the vault.