Yield Tokenization
The yield tokenization market on TON allows users to split stgUSD into:
PT (Principal Token): Represents fixed yield
YT (Yield Token): Represents variable yield
For example, FIVA is one such protocol implementing this model. This mechanism enables tgUSD to support a broader range of DeFi strategies. The interaction and trading between PT and YT can increase market demand for tgUSD → incentivize more users to mint tgUSD → boost tgUSD TVL, forming a virtuous cycle.
Expecting APY to Rise
Buy YT at a low price to gain leveraged exposure to yield increases
- YT is usually priced lower than the underlying asset, allowing users to amplify exposure with the same capital amount - If YT is priced at 5% of the underlying, a 1% yield increase could raise its value by up to 20x - FIVA and partner protocol points can also be leveraged
Higher losses if yields decrease
Expecting APY to Fall
Buy PT to lock in the current fixed return
- PT can be redeemed at maturity for a fixed amount of tgUSD, unaffected by APY changes - Enjoys initial yield even if rates drop (e.g., 10% → 8%, still earns 10%)
Missed upside if yields rise
Expecting APY to Stay Stable
Provide liquidity to FIVA Pools
- Original protocol yield + trading fees + points from FIVA and partners
Minor impermanent loss (IL)
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