> For the complete documentation index, see [llms.txt](https://docs.thefiva.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.thefiva.com/security/risks/pt-risks.md).

# PT Risks

Before diving into the specific risks, it's important to understand what Principal Tokens (PTs) represent within the FIVA protocol. When a user deposits a yield-bearing asset into FIVA, that asset is tokenized into two separate components:

1. A Principal Token (PT) that represents the right to receive the original principal amount at maturity
2. A Yield Token (YT) that represents the right to receive all yield generated by the asset until maturity

Principal Tokens are designed to provide more predictability than the underlying yield-bearing asset, as their value should theoretically converge to a predetermined amount (the face value) at the maturity date. This property makes PTs similar in some ways to zero-coupon bonds in traditional finance, with their value generally becoming less volatile as the maturity date approaches.


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