Fixed Income on Stellar: On-Chain Bonds, Fixed Rates & Yield Tokens
What is fixed income on Stellar?
Fixed income on Stellar is a class of DeFi products that pay a predictable, predetermined yield instead of a floating rate. It brings the traditional-finance idea of bonds and fixed-rate deposits on-chain to Stellar — through fixed-rate vaults and by splitting yield-bearing positions into Principal Tokens (fixed) and Yield Tokens (variable). Spield is the protocol that introduced fixed income to Stellar.
Key takeaways
- Fixed income trades upside for certainty: you know your return and maturity in advance.
- Almost all DeFi yield is variable — fixed income is the missing primitive that lets you lock a rate.
- On Stellar, fixed income is built from real Blend yield, not an invented index.
- The building blocks are Principal Tokens (PT) — on-chain zero-coupon bonds — and Yield Tokens (YT).
- Spield is the fixed-income layer for Stellar: fixed-rate vault, PT/YT tokenization, and a time-decay market.
Why does DeFi need fixed income at all?
DeFi needs fixed income because almost every yield in crypto is variable — the rate changes block by block with supply and demand, so a depositor never really knows what they will earn. Fixed income solves that by letting you lock a known rate for a known term, exactly like a bond or a certificate of deposit in traditional finance.
In traditional markets, fixed income is the largest asset class in the world — bonds are how governments, companies, and savers manage predictable cash flows. DeFi reproduced the variable side (lending, liquidity pools) first, but the predictable, plannable side barely existed on-chain, and on Stellar it did not exist at all before Spield.
How is fixed income built on-chain?
On-chain fixed income is built by separating a yield-bearing position into its principal and its yield, a process called yield tokenization. The principal becomes a token that redeems at full value on a fixed date; the yield becomes a separate token. Locking a rate is then as simple as buying the principal token at a discount.
| Token | What it is | Analogy | Who wants it |
|---|---|---|---|
| Principal Token (PT) | Redeems 1:1 for principal at maturity | Zero-coupon bond | Anyone who wants a fixed return |
| Yield Token (YT) | Captures all yield until maturity | Detached bond coupons | Anyone who wants leveraged yield exposure |
Because the value of the PT plus the value of the YT always equals the underlying, the split is lossless — it just repackages the same position into a fixed leg and a variable leg. The implied APY read from their prices is the fixed rate the market is offering.
What makes Stellar a good home for fixed income?
- Near-zero fees. Fixed income is about small, predictable returns; Stellar’s sub-cent fees mean yield is not eaten by gas the way it can be on Ethereum.
- Native USDC. Circle issues USDC natively on Stellar, so fixed-income products settle in a real stablecoin with no bridge risk.
- A real yield source. Blend Capital provides genuine, on-chain lending yield to build fixed rates from.
- Soroban smart contracts. Soroban makes the necessary DeFi primitives — vaults, AMMs, tokenization — possible on Stellar.
The three fixed-income products on Spield
| Product | What you do | What you get |
|---|---|---|
| Fixed-Rate Vault | Deposit USDC, pick a term | A guaranteed payout (principal + fixed coupon) at maturity |
| Tokenize (Wrapper) | Deposit USDC to mint PT + YT | A tradable bond (PT) and a yield token (YT) |
| PT/USDC Market | Buy PT at a discount or provide liquidity | Fixed yield by buying below par; LPs earn fees on a time-decay AMM |
Fixed income on Stellar vs tokenized treasuries
Both offer predictable yield, but the source differs. Tokenized treasuries derive yield off-chain from U.S. government bonds held by a custodian, while Spield’s fixed income derives yield on-chain from Stellar lending. Tokenized treasuries add regulatory and custody structure; on-chain fixed income adds permissionless access and composability.
Is there fixed income on Stellar?
Yes. Spield is the fixed-income layer for Stellar, offering a fixed-rate vault, principal/yield token splitting, and a market to trade fixed yield — all built on real Blend lending yield.
How is a Principal Token like a bond?
A Principal Token behaves like a zero-coupon bond: it pays no interest along the way and instead redeems for full face value at a fixed maturity date, so buying it at a discount locks in a fixed return.
Where does the fixed rate come from?
From real on-chain yield. Spield supplies deposits into Blend Capital, Stellar’s lending protocol, and uses Blend’s rising bToken exchange rate as the yield it fixes — never an invented or unbacked index.
Can I lose money with on-chain fixed income?
Held to maturity, a Principal Token returns principal plus the locked-in discount. Before maturity its price moves with rates like any bond, and Yield Tokens carry more risk because they can decay to zero if realized yield underperforms the implied APY.