FAQ
Why is yield higher than in underlying protocols?
The yield is determined by market participants, who trade and speculate based on their expectations until the maturity date. Some users want to sell their yield for immediate returns, while others seek leveraged yield positions, creating dynamic pricing. This market-driven approach allows for capital efficiency, providing more tools for yield management.
What is yield tokenization?
Yield tokenization involves splitting an existing yield-bearing asset into two separate tokens: one representing the principal (PT) and the other representing the yield (YT). This process allows the yield component to be traded independently of the principal.
Why is maturity needed?
Maturity adds a defined time period for which market participants can predict and trade yield. This helps facilitate price discovery by creating expectations around the yield until the maturity date, making it easier to form strategies and trade derivatives.
Should I lock my assets?
No, your assets are always available and can be swapped or unwrapped through our protocol. However, by holding PT tokens, you fix your yield until maturity. While you can exit earlier, the value will be determined by the market price at the time of the swap.
How do you provide fixed yield?
Fixed yield is achieved when you purchase PT tokens. Similar to zero-coupon bonds, PT tokens are bought at a discount, and at maturity, you receive the full value of the underlying asset. The difference between the purchase price and the redemption value gives you a fixed rate of return, which can be calculated at the time of purchase.
How can I get leverage on yield exposure?
YT tokens represent only the yield earned until maturity. For example, if you buy 1000 YT-stTON, you will receive the yield equivalent to staking 1000 TON in the Bemo protocol, but at a fraction of the cost since you are not buying the principal (PT-stTON). This allows you to amplify your yield exposure with less capital.
How can I hedge my yield risks?
To hedge against yield fluctuations or a potential decrease in APY, you can open a position in PT tokens. By holding PT, you lock in your current yield and protect yourself from any decreases in APY, effectively securing a fixed rate.
How do you eliminate impermanent loss?
FIVA’s AMM design, which pairs SY tokens and PT tokens, mitigates impermanent loss (IL). Since the value of PT and SY tokens converges at maturity, IL is effectively minimized at that point. While there may be small fluctuations before maturity, the impact is generally low, as the prices of both assets in the pair will equalize over time.
Do you have audits?
We are working with external auditors to ensure the security of our smart contracts. Audits will be completed and shared with the community in the near future.
Do you have points or tokens?
Yes, we have a point system and will soon launch a token. This token will allow users to govern the protocol, reduce protocol fees, and boost pool rewards. Contributing to the project by testing and providing liquidity will earn incentives.
How are you different from Pendle?
FIVA introduces this concept to the TON blockchain, which is more scalable and asynchronous by design. Additionally, our seamless Telegram integration makes yield management tools just one click away from your messenger. Our vision is to build a protocol that offers not only yield tokenization but also a broader marketplace for the most lucrative yield opportunities in DeFi.
What does the maturity date mean?
The maturity date defines the point at which PT and YT tokens reach their final value. For PT tokens, you can redeem the underlying asset after maturity. For YT tokens, yield is earned only up to the maturity date, after which YT has no value.
Why is the underlying APY shown on FIVA different from the APY in the underlying protocol?
The Underlying APY displayed on FIVA is a 7-day moving average of the underlying protocol’s APY. This smooths out short-term fluctuations and gives a more stable representation of the yield over time.
What do I receive in return for providing liquidity?
By providing liquidity, you earn:
Swap fees generated by the pool
FIVA protocol incentives
Rewards emitted by the underlying asset (e.g., stTON, EVAA)
Do I need to stake my LP tokens to earn rewards?
No, there is no need to stake LP tokens separately. All LP token holders automatically receive their share of the rewards.
What risks are associated with using the protocol?
FIVA interacts with third-party protocols, so there is inherent risk related to the smart contracts and systems deployed by those protocols. FIVA is not responsible for any losses resulting from exploits in third-party contracts.
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