PT (Principal Token)

The Principal Token (PT) represents the principal portion of an underlying yield-bearing asset within the FIVA protocol. Once maturity is reached, PT can be redeemed at a 1:1 ratio for the base asset. This base asset is the core asset deployed within underlying protocols such as Bemo, Tonstakers, and Ethena. For example, TON is the base asset in stTON, and USDT is the base asset in USDe.

Since the yield portion has been separated from the principal, PT can typically be purchased at a discount compared to the full value of the base asset. As the maturity date approaches, the value of PT naturally converges with the value of the base asset. This appreciation in value is what provides Fixed Yield APY.

PT Value at Maturity

For interest-bearing assets (tokens that increase in value over time as yield accrues, such as stTON and tsTON) it’s essential to highlight that PT is redeemable 1:1 for the base asset, not the underlying yield-bearing token.

For instance, the value of stTON from Bemo increases over time compared to TON, as staking rewards are accumulated. When you hold 1 PT-stTON, you can redeem it for 1 TON worth of stTON at maturity, not 1 stTON, which would have appreciated in value during the staking period.