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  "id": "principal-yield-tokens",
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  "collection": "defi",
  "title": "Principal and yield tokens: separating a yield-bearing claim",
  "description": "Understand separating a principal claim from future yield and why the accounting asset and maturity matter.",
  "aliases": [
    "Pendle PT YT explained",
    "Pendle PT accounting asset and maturity"
  ],
  "dates": {
    "published": "2026-10-02",
    "modified": "2026-10-02",
    "verified": "2026-10-02T19:18:00.092Z",
    "dataAsOf": "2026-10-02"
  },
  "authorship": {
    "publisher": "Degrees of Satoshi editorial project",
    "process": "AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied."
  },
  "quickAnswer": {
    "text": "Yield tokenization splits a yield-bearing position into a principal claim and a claim on yield until an expiry. Pendle calls these PT and YT. PT’s intended redemption is measured in the market’s accounting asset, which may differ from the token delivered; underlying losses can reduce that redemption, so principal does not mean a capital guarantee.",
    "claimId": "principal-yield-tokens-quick-answer",
    "sourceIds": [
      "x425-defi-pendle",
      "x425-defi-pendle-pt",
      "x425-defi-pendle-contracts"
    ]
  },
  "keyFacts": [
    {
      "label": "PT",
      "value": "The principal claim becomes redeemable without YT after maturity.",
      "sourceIds": [
        "x425-defi-pendle-contracts"
      ],
      "id": "pt",
      "claimId": "principal-yield-tokens-fact-pt"
    },
    {
      "label": "YT",
      "value": "The yield claim covers the period before expiry.",
      "sourceIds": [
        "x425-defi-pendle-contracts"
      ],
      "id": "yt",
      "claimId": "principal-yield-tokens-fact-yt"
    },
    {
      "label": "Underlying loss",
      "value": "Sustained negative underlying yield can reduce PT’s eventual accounting-asset value.",
      "sourceIds": [
        "x425-defi-pendle-contracts"
      ],
      "id": "underlying-loss",
      "claimId": "principal-yield-tokens-fact-underlying-loss"
    }
  ],
  "prerequisites": [
    "yield-vaults"
  ],
  "sections": [
    {
      "id": "example",
      "heading": "Keep the accounting unit visible",
      "sourceIds": [
        "x425-defi-pendle-pt",
        "x425-defi-pendle-contracts"
      ],
      "paragraphs": [
        "Imagine a market whose accounting asset is A, but whose underlying yield token W is worth 1.25 A. A claim intended to redeem one A of value corresponds to 0.8 W at that exchange rate, not one W. The actual wrapper and index determine the amounts.",
        "Buying that claim for 0.96 A implies a 0.04 A gain if the intended one-A redemption occurs. Fees, early-sale price and underlying losses can change the result."
      ]
    },
    {
      "id": "yield",
      "heading": "A yield token is a time-limited claim",
      "sourceIds": [
        "x425-defi-pendle-contracts"
      ],
      "paragraphs": [
        "YT receives the applicable interest and rewards before expiry. Its right to future accrual ends at maturity; previously accrued amounts are separate claims. Paying for YT is therefore paying for an uncertain stream, not buying a perpetual income right."
      ]
    },
    {
      "id": "risk",
      "heading": "The underlying strategy remains part of the position",
      "sourceIds": [
        "x425-defi-pendle-contracts"
      ],
      "paragraphs": [
        "Pendle’s technical documentation describes an index that does not move down when the underlying exchange rate falls. During such a drawdown, new YT interest can pause and PT can ultimately redeem less accounting-asset value. Read the market’s accounting asset, maturity and underlying mechanism before interpreting a fixed-yield display."
      ]
    }
  ],
  "faq": [
    {
      "question": "Does one PT always redeem for one underlying yield token?",
      "answer": "No. PT is defined in accounting-asset units. The amount of underlying or wrapper token can differ.",
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      ]
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      "statement": "Yield tokenization splits a yield-bearing position into a principal claim and a claim on yield until an expiry. Pendle calls these PT and YT. PT’s intended redemption is measured in the market’s accounting asset, which may differ from the token delivered; underlying losses can reduce that redemption, so principal does not mean a capital guarantee.",
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        },
        {
          "sourceId": "source-720faf7ceae7b0a4",
          "locator": "Redemption Value; Key Properties"
        },
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          "sourceId": "source-0327c9715bfa2756",
          "locator": "redeemPY; pyIndexCurrent; Negative Yield"
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      ],
      "scope": {
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        "notes": [
          "Checked Pendle accounting-asset principal, PT/YT expiry and nondecreasing index response to negative yield;1/1.25=.8W and1−.96=.04A remain conditional."
        ]
      }
    },
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      "statement": "PT: The principal claim becomes redeemable without YT after maturity.",
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        "notes": [
          "Checked Pendle accounting-asset principal, PT/YT expiry and nondecreasing index response to negative yield;1/1.25=.8W and1−.96=.04A remain conditional."
        ]
      }
    },
    {
      "id": "principal-yield-tokens-fact-yt",
      "articleSlug": "principal-yield-tokens",
      "statement": "YT: The yield claim covers the period before expiry.",
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        "notes": [
          "Checked Pendle accounting-asset principal, PT/YT expiry and nondecreasing index response to negative yield;1/1.25=.8W and1−.96=.04A remain conditional."
        ]
      }
    },
    {
      "id": "principal-yield-tokens-fact-underlying-loss",
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        "notes": [
          "Checked Pendle accounting-asset principal, PT/YT expiry and nondecreasing index response to negative yield;1/1.25=.8W and1−.96=.04A remain conditional."
        ]
      }
    }
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      "locator": "Redemption Value; Key Properties",
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      "note": "Technical limitations qualify introductory fixed-yield descriptions.",
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  "related": {
    "articles": [
      "fixed-variable-defi-borrowing",
      "wrapped-staked-ether",
      "realized-vs-projected-yield",
      "vault-curators-allocators"
    ],
    "dossiers": [],
    "wallets": []
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  "revisionHistory": [
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      "date": "2026-10-02",
      "kind": "published",
      "summary": "First publication after primary-source research and separate automated verification."
    }
  ],
  "citation": "Degrees of Satoshi editorial project. “Principal and yield tokens: separating a yield-bearing claim.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/principal-yield-tokens/"
}