Crypto Newbie / Simulators / Pendle PT/YT
Pendle PT/YT Split Simulator
Pendle is the largest yield-trading protocol in DeFi ($4B+ TVL). Every yield-bearing token (sUSDe, stETH, sDAI) can be split into PT (Principal Token, locks in a fixed yield) and YT (Yield Token, leveraged exposure to future yield). This simulator shows the price identity PT + YT = 1, the implied yields, and break-even points so you can decide between buying PT for a known yield or buying YT for a yield bet.
Pendle market parameters
Price identity
PT
0.9500
YT price (= 1 − PT)
0.0500
Computed yields
PT fixed yield (annualised)
10.80%
YT break-even implied APY
10.00%
Required underlying APY for YT to profit
10.00%
YT P&L if actual APY = underlying
-0.00%
Strategies
| Strategy | Estimated APY | Risk profile |
|---|---|---|
| Buy PT (Fixed Yield) Lock in fixed yield to maturity | +10.80% | No yield risk; only smart contract risk + opportunity cost if rates rise |
| Buy YT (Leveraged Yield) Bet that future yield > implied | -10000.00% | Loses if actual yield falls below implied; gains amplify if yield rises |
| LP PT-YT Pool Earn trading fees + boosted PENDLE rewards | +15.00% | Impermanent loss as PT-YT prices shift; needs active management near maturity |
The PT-YT identity — why prices always sum to 1
Pendle splits a yield-bearing token (worth 1 unit at maturity) into PT and YT. By construction: PT + YT = 1. At maturity, PT redeems for 1 unit; YT has collected all the yield generated until then. If PT trades at 0.95, YT trades at 0.05 — the market is implying 5/95 ≈ 5.3% of additional yield will accrue until maturity. Whether that's a good price for YT depends on whether you think actual yield will exceed that implied rate.
Buying PT — the fixed-yield trade
PT is the simplest Pendle product. Buy PT at 0.95 today, redeem 1 unit of underlying at maturity. Return = (1/0.95) - 1 = 5.26% over the maturity period, annualized. This is FIXED — regardless of what happens to the underlying yield rate (sUSDe might drop from 10% APY to 4% APY, you still get your PT yield). This is the dream for risk-off DeFi yield: predictable income, no rate exposure, denominated in the underlying asset.
Buying YT — the leveraged-yield bet
YT is leveraged exposure to yield. Buy YT at 0.05, you receive ALL yield generated until maturity. If the underlying yields 10% for 1 year and YT cost you 0.05, you collected ~0.10 in yield = 100% return. But if underlying yields fall to 2% (so you only collect 0.02), your YT investment loses 60% (paid 0.05, got back 0.02). YT is for traders who think implied yield is too low and want leveraged exposure to a yield rise. Most retail users skip YT — institutional desks dominate this side.
Why Pendle has $4B+ TVL — the use case is real
Pendle solved a real problem: DeFi yields are highly variable, and most users want either fixed income or leveraged speculation, not the middle. Splitting into PT + YT lets each user pick exactly what they want. Pension-fund-style allocators buy PT to lock yields for budgeting. Yield-chasing degens buy YT to amplify rate moves. The protocol earns fees from both sides. The trade-off: Pendle is complex — most users have to spend hours learning the mental model before they can use it confidently. This is why retail use is concentrated in PT (the simpler product).
Frequently asked questions
+Why would I buy PT instead of just holding the underlying yield-bearing token?
Three reasons: (1) Fixed yield — you know exactly what you'll get, no rate risk. The underlying APY might drop; your PT yield doesn't. (2) Sometimes PT yields more than the underlying because the AMM has accumulated discount. If sUSDe yields 10% and PT-sUSDe yields 12% fixed, that's a free 2% from Pendle's pricing dynamics. (3) Cleaner for accounting / tax — one entry point, one exit point, fixed amount.
+What's the worst case for buying YT?
YT goes to zero. If the underlying yield rate drops to ~0% (e.g., the source protocol pauses staking rewards) and YT can't collect anything before maturity, your YT investment is a total loss. YT also has theta decay — as time passes without yield accruing, YT price drops toward 0. Don't buy YT if you can't tolerate full loss on that portion.
+Is Pendle safe?
Smart contract risk is real (Pendle V2 has been audited by multiple firms but bugs happen). Liquidity for some markets is thin (you may not be able to exit large positions at fair prices). The biggest risk specific to Pendle: the underlying yield-bearing protocol gets hacked, your PT/YT becomes worthless because there's nothing to redeem. Stick to high-quality underlying tokens (sDAI, stETH, sUSDe from Ethena) where the source protocol is well-tested.
+Can I LP the PT-YT pool as an alternative?
Yes — Pendle has its own LP pools (PT vs SY where SY is the standardized yield wrapper). LPing earns trading fees + PENDLE token rewards. Yields can be 10-20% APR for popular markets. The risk: impermanent loss as PT prices shift, especially near maturity when PT converges to 1.0. LP positions need active management.
+What happens at maturity if I do nothing?
PT auto-redeems for 1 unit of underlying. YT becomes worthless (it can only claim yield that accrued during the active period). You can also withdraw or roll into a new maturity. Most Pendle markets have multiple maturity dates (3 months, 6 months, 1 year) so you can ladder positions.