Yield Farming with YT

When you buy YT tokens, you are purchasing the future yield generated by the underlying protocol. For example, let’s say you buy 1000 YT tsTON tokens, and the APY of tsTON is 4%. Over one year, you would earn 40 TON in yield (1000 TON * 4% APY).

The yield you earn can be claimed directly from your dashboard on the FIVA protocol. Unlike PT, you don’t have to wait until the end of the year to claim your YT.

Here’s another scenario: If you decide to sell your YT tokens after 6 months, and the market rate remains at 4% APY, you will have already earned half of the 40 TON (20 TON). You can claim the 20 TON and then sell the YT tokens for another 20 TON. This way, you effectively earn the full 40 TON yield but split the timing of your returns.

The buyer who purchases your YT tokens will then receive the remaining 20 TON by holding the YT tokens until maturity. Once maturity is reached, the YT token will no longer generate yield, and its value will drop to zero.

Key Takeaway:

• YT tokens allow you to buy and sell future yield, but they lose value as they approach maturity because they no longer generate yield after that point.