Margin & liquidation
P&L by realized Underlying APR
A YU position never bets on the perp's price — only on whether the realized floating funding rate over the holding period lands above or below the Implied APR locked in at entry. This sweeps a range of realized rates around your entry rate.
| Realized Underlying APR | APR spread (pp) | P&L ($) |
|---|
How it works
Every perp market pays or charges a funding rate between longs and shorts, but until Boros that rate could only be captured by actually holding a leveraged perp position, bundled together with price risk. Boros unbundles it: a Yield Unit (YU) represents pure exposure to one market's funding stream, with no price risk on the underlying asset at all. Buying YU (going long) means you agree to pay a fixed rate — the Implied APR, set by the market when you enter — in exchange for receiving whatever the perp's actual funding rate turns out to be, the Underlying APR, for as long as you hold. Selling YU (going short) is the reverse: you collect the fixed Implied APR and pay out the floating Underlying APR. Boros settles this difference periodically — every hour on Hyperliquid, every 8 hours on Binance-style venues — applying the prorated APR spread directly to your posted collateral each time, using simple (non-compounded) annualized interest. Because the trade is entirely about the funding-rate spread, it's used both to hedge funding costs on an existing perp position and to speculate outright on whether funding will run hot or cold relative to what the market has already priced in.
Reading the numbers
At the defaults — $10,000 notional, long YU entered at 8% Implied APR, an assumed 14% realized Underlying APR held for 30 days — the position captures a 6 percentage-point spread (14% − 8%) prorated over 30 of 365 days: $10,000 × 0.06 × (30/365) ≈ $49.32 of profit. Flip the position to short at the same rates and it loses the same $49.32, since a short YU pays the floating rate and receives the fixed one — the trade only works when realized funding comes in below, not above, the fixed rate. Margin works independently of realized outcomes: Initial Margin is Notional × Years-to-Maturity × Implied APR ÷ Leverage, so at 90 days to maturity, 8% Implied APR and 10x leverage, Initial Margin is $10,000 × (90/365) × 0.08 ÷ 10 ≈ $19.73, and Maintenance Margin sits at 66% of that, roughly $13.02. Because Maintenance Margin is a small fraction of notional by design (it's sized off the rate and term, not the full position value), a YU position needs comparatively little collateral to open — but that also means the spread between Initial and Maintenance Margin is thin, so a string of settlements running against you can approach the liquidation threshold faster than the small margin numbers might suggest.