Glossary

Glossary in crypto yield

Yield-Bearing Token A yield-bearing token is a broad term that refers to any token that generates yield. Examples include haSUI, sSUI, LP-SUI_USDC, etc.

Source: Internet

Underlying Asset An underlying asset is the token to which the yield-bearing token is pegged. For example, haSUI generates yield in terms of SUI. Therefore, haSUI is a yield-bearing token, and SUI is the underlying asset.

source: Florence Finance

SY (Standardized Yield) SY is a yield-bearing token whose value increases over time. For instance, if I bought 1 haSUI with 1.2 SUI yesterday, and later, when it matures, I can sell 1 haSUI for 1.3 SUI, the 0.1 SUI difference is the yield. A wrapper is required to convert any yield-bearing token into an SY, demonstrated by an increasing slope in the exchange_rate function. For example, if Y SY is worth X underlying assets, the exchange rate is X / Y.

PT (Principal Token) A PT entitles you to the principal of the underlying yield-bearing token, redeemable upon maturity. For example, if you own 1 PT-haSUI with a 1-year maturity, you can redeem 1 SUI worth of haSUI after 1 year. In other words, you will redeem haSUI with a value equivalent to SUI. PT is tradable anytime (via Kamo Finance AMM), even before maturity.

YO (Yield Object) A Yield Object entitles you to all the yield generated by the underlying yield-bearing token in real time. The accrued yield can be manually claimed at any time from the Kamo Dashboard. For example, if you own 1 YO-haSUI and haSUI has an average yield of 5% through the year, you will have accrued 0.05 haSUI by the end of the year. YO is tradable anytime (via Kamo Finance AMM), even before maturity. We use the term "Yield Object" instead of "Yield Token" due to the nature of $SUI blockchain, allowing full control over the yield. It is tradable, transferable, and claimable as a token. Although you cannot interact directly through a wallet, you can still use the Kamo Dashboard to perform actions.

Maturity Maturity is the date at which PT becomes fully redeemable for the underlying asset, and YO stops accruing yield. One asset can have multiple maturity dates, with an independent market for each date. As such, the implied yield of an asset can also vary across different maturities.

Underlying APY The Underlying APY represents the 7-day moving average yield rate of the underlying asset. This method provides a more accurate indication of the underlying yield over a period of time, helping traders better estimate the Future Average Underlying APY.

Implied APY The Implied APY reflects the market consensus on the future APY of an asset. It is calculated based on the price ratio of YO to PT using a specific formula. When used alongside the Underlying APY, the Implied APY helps determine the relative valuation of assets such as YO and PT at their current price, aiding traders in formulating strategies. The value of the Implied Yield is numerically equivalent to the Fixed Yield APY.

Fixed APY Fixed APY is the guaranteed yield you receive by holding PT. This value is numerically equivalent to the Implied APY. For example, if you buy 1 PT-haSUI worth 1.3 SUI before maturity, and after maturity, you can redeem haSUI worth 1.5 SUI, the 0.2 SUI difference is the fixed yield by holding PT-haSUI.

Long Yield APY Long Yield APY is the approximate annualized return from buying YO at the current price, assuming the Underlying APY remains constant. This value can be negative, indicating that the total value of all future yield based on the Underlying APY will be less than the cost of purchasing YO.