Spield Spield

Time-Decay AMM

A time-decay AMM is an automated market maker designed to trade Principal Tokens, whose pricing curve accounts for the fact that a PT converges to par value as maturity approaches. This structure lets liquidity providers earn swap fees while facing near-zero impermanent loss if they stay until maturity.

A time-decay AMM (popularized by Pendle) prices a PT against its underlying with a curve that shifts over time, because a PT is worth more the closer it gets to maturity. Spield runs a PT/USDC time-decay market of this kind.

Because PT price predictably converges to par and the YT decays to zero, an LP who holds to maturity faces near-zero impermanent loss while still collecting swap fees — a key advantage over standard AMMs.