Our new article, Introducing Napier AMM, is already live!
Ctrlk
LearnCurateBuildInvestBlogLaunch App
For the complete documentation index, see llms.txt. This page is also available as Markdown.

Leveraged Yield (YT)

By holding YT, you give up the principal and gain leveraged exposure to both yield and reward points.

For example, 1 YT cUSDO (USDO) entitles you to the yield and points generated by 1 USDO until maturity (in some cases, the points may be subject to multipliers).

Long APY represents the cost or payoff until maturity — essentially, the yield you earn from YT minus the cost of purchasing the YT. If the implied APY exceeds the net APY, your position declines (negative carry); if the implied APY is below the net APY, your position grows (positive carry).

Steps to Leveraged Yield

Get leveraged exposures by holding yield tokens:

1

Step 1: Select a Market

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

2

Step 2: Open a "Leveraged Yield" Tab

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

3

Step 3: Select an Action

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

Flow (Buying YT)

  1. Buyer sends underlying assets (e.g, cUSDO) into the swap contract

  2. Contract withdraws more underlying assets from the pool

  3. Mint PTs and YTs from all of the underlying assets

  4. Send the YTs to the buyer

  5. The PTs are sold for underlying assets to return the amount from step 2

Flow (Selling YT)

  1. Seller sends YTs into the swap contract

  2. Contract borrows an equivalent amount of PTs from the pool

  3. The YTs and PTs are used to redeem corresponding underlying assets

  4. Underlying assets are sent to the seller

  5. A portion of the underlying assets is sold to the pool for PT to return the amount from step 2

Note that selling your YT means you are giving up the right to claim any future yield associated with that position.

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.

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. (e.g., 1 PT-wstETH + 1 YT-wstETH → 1 ETH)

  • After maturity: Redeem with PT only → receive the underlying asset. (e.g., 1 PT-wstETH → 1 ETH)

Flow (Claiming Yield on YT)

Claiming yield lets you collect the accrued variable yield generated before maturity.

Before Maturity

  • You can claim yield anytime from your YT position.

  • The claimed amount reflects the yield accumulated since your last claim.

Note that a percentage-based performance fee is applied to the yield accumulated on your YT holdings. Example: 1 YT-stETH → claim 0.02 stETH (minus performance fee)

After Maturity

  • No further yield accrues after the market reaches maturity.

  • You can still claim any yield accumulated before maturity at any time after maturity.

4

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 implied APY: APY based on the actual rate that the user used to swap.

  • 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.

For more on APY and return calculations, see Calculation.

Setting

Customize the transaction settings to your preferences.

  • 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.

5

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.

PreviousFixed Yield (PT)
NextLiquidity (LP)

Last updated

Was this helpful?