PT

Principal Token

What is a Principal Token (PT)? A Principal Token (PT) represents the principal portion of an underlying yield-bearing asset. At maturity, PT can be redeemed at a 1:1 ratio for the accounting asset. The accounting asset is the base asset deployed in the underlying protocol, such as SUI for haSUI, vSUI, afSUI, sSUI.

PT Mechanics

Since the yield component is separated from the principal, PT can often be purchased at a discount compared to its accounting asset. As maturity approaches and redemption becomes possible, the value of PT gradually increases, eventually matching the value of the accounting asset.

This predictable appreciation in value is what establishes its Fixed Yield APY.