Yield tokenization
PT vs YT: Which Should You Buy?
PT vs YT explained as a decision guide: buy PT to lock a fixed rate, buy YT to bet yield rises. Learn which fits your goal, with examples.
Should you buy a PT or a YT?
Buy a Principal Token (PT) if you want a guaranteed fixed return — you buy it at a discount and redeem it at full value at maturity. Buy a Yield Token (YT) if you want leveraged exposure to yield and believe the actual yield will beat the market’s implied rate. PT is the conservative, fixed-income choice; YT is the higher-risk, higher-upside bet on rising yield.
Key takeaways
- PT = fixed income. Lock a known return; low risk if held to maturity.
- YT = long yield. Leveraged, higher risk, can decay to zero.
- The dividing line is the implied APY: PT buyers accept it; YT buyers bet against it.
- Hold PT to maturity → your return is locked the moment you buy.
- Not sure? Holding both simply reconstructs your original variable position.
#PT vs YT at a glance
| Principal Token (PT) | Yield Token (YT) | |
|---|---|---|
| Goal | Lock a fixed rate | Bet yield will rise |
| Analogy | Zero-coupon bond | Leveraged yield position |
| Risk | Low if held to maturity | High — can decay to zero |
| Payoff | Discount → par at maturity | All yield until maturity |
| You win if | You want certainty | Realized yield > implied APY |
| You lose if | Rates rise sharply and you sell early | Realized yield < implied APY |
#When should you buy a PT?
Buy a PT when you want a known, guaranteed return and value certainty over upside. You purchase the PT below par (say 0.95 for a 1.00 redemption), hold to maturity, and collect the difference as fixed yield — unaffected by what the variable rate does in between. This is the on-chain equivalent of buying a bond.
#When should you buy a YT?
Buy a YT when you believe actual yield will exceed the implied APY and you want leveraged exposure to that view. Because a small amount of capital buys the yield stream of a much larger principal, YT amplifies returns if you are right — and can lose value, even reach zero, if realized yield disappoints.
Is buying a PT the same as locking a fixed rate?
Yes. Buying a Principal Token at a discount and holding it to maturity locks in a fixed return equal to the gap between your purchase price and the redemption value, regardless of how the variable rate moves.
Can a Yield Token go to zero?
Yes. A Yield Token delivers yield only until maturity and then expires worthless by design, and it can lose value before then if realized yield underperforms the implied APY you paid.
What if I buy both PT and YT?
Holding both in equal amounts reconstructs your original variable-yield position — you own the principal and its yield again, just split into two tokens you could sell separately later.
Educational content, not financial advice. Spield is deployed on Stellar testnet and has not been audited; any figure shown in these guides is a worked example chosen to explain a mechanism, never a quote or a live reading.