# Fixed Yield (PT)

A Principal Token (PT) generates a fixed yield by being purchased at a discount to its redemption value at maturity.

For example, since 1 PT cUSDO (USDO) is redeemable for 1 USDO at maturity, if you buy 1 PT cUSDO for 0.9 USDO, you will earn a 11.1% fixed yield at maturity.

### **Steps to Fixed Yield**

Earn guaranteed returns by holding principal tokens:

{% stepper %}
{% step %}

### Step 1: Select a Market 

Make sure you’re on the page of the market where you want to execute your trade.

<div align="left" data-with-frame="true"><figure><img src="https://4277771176-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FGPkrMXT982thgzhBdzF8%2Fuploads%2FGPdTlyDzQj4c5XL5PIQX%2FScreenshot%202025-10-14%20at%206.48.46%20PM.png?alt=media&#x26;token=b1f2e6ef-c349-4b44-82d3-87daf9c4b8c7" alt="" width="563"><figcaption></figcaption></figure></div>
{% endstep %}

{% step %}

### Step 2: Open a "Fixed Yield" Tab

When you click the **Fixed Yield** button, available actions will appear.

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{% endstep %}

{% step %}

### **Step 3:** Select an Action

Select the action you wish to perform and follow the corresponding guide below.

{% tabs %}
{% tab title="Buy" %}

#### Flow (Buying PT)

**Buying PT through AMM**

* PTs are traded through the Napier AMM.
* The exchange rate between the PT and the underlying asset is determined by the AMM and displayed on the UI. (e.g., `1 PT-wstETH = 0.97 wstETH`).

**Holding PT**

* You can sell your PT anytime before maturity through the AMM.
* If you hold until maturity, each PT can be redeemed 1:1 for the corresponding underlying asset (e.g., `1 PT-wstETH → 1 ETH`).
* PTs can also be used in DeFi protocols (e.g., as collateral in lending markets).
  {% endtab %}

{% tab title="Sell" %}

#### Flow (Selling PT)

**Selling PT through AMM**

* PTs are traded through the Napier AMM.
* The exchange rate between the PT and the underlying asset is determined by the AMM and displayed on the UI. (e.g., `1 PT-wstETH = 0.97 wstETH`).

**Before selling PT**

* PT can be redeemed 1:1 for the corresponding underlying asset if you hold until maturity (e.g., `1 PT-wstETH → 1 ETH`).
* PTs can also be used in DeFi protocols (e.g., as collateral in lending markets).
  {% endtab %}

{% tab title="Mint" %}

#### Flow (Minting PT and YT)

1. Start with an underlying assets.
2. Deposit → receive **PT** + **YT** in equal notional amounts.\
   E.g. ETH → stETH → PT-stETH + YT-stETH
3. PT tracks principal; YT tracks the accrued yield.
   {% endtab %}

{% tab title="Redeem" %}

#### Flow (Redeeming PT and YT)

Redemption lets you reclaim the **underlying asset** from your PT and/or YT.

* Before maturity:\
  Redeem with equal amounts of PT and YT → receive the underlying asset.\
  \&#xNAN;*(e.g., 1 PT-wstETH + 1 YT-wstETH → 1 ETH)*
* After maturity:\
  Redeem with PT only → receive the underlying asset.\
  \&#xNAN;*(e.g., 1 PT-wstETH → 1 ETH)*
  {% endtab %}

{% tab title="Transfer" %}

#### Transfer —  Coming Soon

1. Select Market A (source).
2. Select Market B (destination).
3. Exit from A:
   1. Before maturity: your PT will be sold via the AMM.
   2. After maturity: your PT will be redeemed for the accounting asset.
4. Re-enter in B:\
   Use the proceeds from Step 3 to buy PT in Market B.

{% hint style="info" %}
The transfer is executed as a **batch transaction** (a combination of existing actions).\
Execute carefully and monitor the **rate** to **maximize returns** and **minimize price impact**.
{% endhint %}
{% endtab %}

{% tab title="Migrate" %}

#### Migrate (Redeem + Buy) —  Coming Soon

Migrate lets you move A (your existing Pendle position) to B (a Napier market).

1. Select Market A (source).
2. Select Market B (destination).
3. Exit from A:
   * Before maturity: your PT is sold via the AMM.
   * After maturity: your PT is redeemed for the accounting asset.

     > Recommendation: Redeem after maturity when possible.
4. Re-enter in B:\
   Use the proceeds from Step 3 to buy PT in Market B.
   {% endtab %}
   {% endtabs %}

{% endstep %}

{% step %}

### **Step 4:** Review and Execute

Before executing a transaction, review your **rate** and **costs** carefully.

#### Estimate

* **Network cost:** Blockchain network fee.
* **Fee:** Percentage-based protocol charge.
* **Effective fixed APY:** The actual fixed APY you earn from this trade after accounting for price impact and fees. Equivalent to the final execution price or average acquisition price of PT.
* **Earned at maturity:** Profit at maturity, expressed in the underlying token.
* **Implied APY change:** Variation in implied APY compared to before the trade.
* **Min. Received:** The minimum expected amount you’ll receive after a swap or transaction, factoring in slippage.

{% hint style="info" %}
For more on APY and return calculations, see **Calculation**.
{% endhint %}

#### Setting

Customize the transaction settings to your preferences.

<div align="left" data-with-frame="true"><figure><img src="https://4277771176-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FGPkrMXT982thgzhBdzF8%2Fuploads%2F2Aae2HTGr7fcrzHiZa2R%2FScreenshot%202025-10-15%20at%201.10.23%20PM.png?alt=media&#x26;token=193785d6-c8c6-4060-9ea6-e4beee67c70b" alt="" width="563"><figcaption></figcaption></figure></div>

* **Max. Slippage:** The maximum percentage deviation allowed between the expected and actual execution price during a swap.
  * **Auto:** Automatically sets slippage tolerance based on market conditions.
  * **Custom:** Allows you to manually define your preferred slippage tolerance.
* **Transaction deadline:** The time limit within which the transaction must be completed to avoid failure.
* **Aggregators:** Currently, Napier supports 1inch as an external swap aggregator.\
  Support for additional aggregators will be expanded in the future.
  {% endstep %}

{% step %}

### Step 5: Check in your portfolio

#### Where can I view my portfolio?

Check your active positions and rewards in the app’s **Portfolio** section. It provides a complete view of your balances, accrued yield, and strategy exposure across all Napier markets and integrations.

#### Further yield opportunities?

Dive deeper into structured plays, including:

* **Advanced:** PT/LPTs as collateral (lending integrations), and etc
  {% endstep %}
  {% endstepper %}