Pendle launches SK Hynix funding hedge as ADR conversion cap blocks new supply

Pendle’s Boros platform has launched a funding-rate market for the SK Hynix perpetual contract on Hyperliquid, giving traders a way to hedge, lock in or speculate on volatile funding costs tied to a cross-market arbitrage between Seoul-listed shares, U.S.-traded ADRs and crypto-linked instruments. SK Hynix’s ADRs were still trading at about a 29.8% to 30% premium to the Korean shares around July 22, as traders built strategies spanning spot holdings, ADRs, on-chain perpetuals, Hong Kong leveraged ETFs and funding rates. The Korea Securities Depository said SK Hynix set a 2.5% cap on converting Korean shares into ADRs, and the company’s CEO said the roughly $26.5 billion ADR issuance on July 10 had already used that full allowance. That means additional share-to-ADR conversions cannot proceed unless existing ADR holders convert back into Korean shares. Earlier expectations had pointed to the end of July, including July 29, as a possible turning point when two-way conversion would open, but the newer details indicate fresh ADR creation remains constrained by the cap unless reverse conversions occur. SK Hynix declined to comment. That constraint helps explain why traders are focused on funding risk when shorting the ADR-linked SKHYNIX perpetual on Hyperliquid against long positions in cheaper Korean shares. Since listing, the perpetual has carried average annualized funding of roughly 64%, with single-day annualized swings between -452% and +276%. Boros uses tokenized yield units to let traders turn that variable exposure into a fixed rate; early implied APRs for the SKHYNIX market ranged from 18.99% to 40%, with initial volumes of about $30,000 to $42,000.