Implied APY
Implied APY is the annualized fixed yield the market is currently pricing into a yield-tokenized asset, derived from the prices of its Principal Token and Yield Token. It is the fixed rate you lock in by buying the PT, and the break-even rate a Yield Token buyer must beat to profit.
Implied APY is the yield the market expects, expressed as an annual rate and read directly from token prices. When a PT trades at a discount, that discount implies a fixed return to maturity — the implied APY.
It is the counterpart to underlying APY, which is the actual (variable) rate the deposit is currently earning. If underlying APY ends up higher than the implied APY you paid, a YT buyer profits; if lower, a PT buyer got the better deal by locking the fixed rate.