PT Pricing

PT is essentially a zero-coupon bond. You buy it at a discount, and it becomes redeemable for the underlying LP value when the cycle matures. The size of the discount relative to the maturity target is your fixed return.

Price → APY

The PT price directly implies a fixed APY based on the discount relative to the maturity target:

$\text{Implied APY} = \frac{\text{Maturity Target} - \text{PT Price}}{\text{PT Price}} \times \frac{365}{\text{Days to Maturity}} \times 100\%$

The maturity target (V(t)) represents the current value of the underlying LP position per PT unit. It fluctuates with impermanent loss/gain — it is not always $1.00.

Example

The cheaper the PT relative to V(t), the higher your guaranteed return.

How Prices Are Set

The Yield Forge AMM handles price discovery:

1. First LP deposits PT and sets the initial discount (e.g., 5%). This determines the starting price.
2. Traders move the price through buying and selling:
   • Buying PT → price goes up → implied yield goes down
   • Selling PT → price goes down → implied yield goes up
3. Near maturity, PT price naturally converges toward the maturity target V(t) as the remaining discount shrinks.

Reading the Market

!TIP The PT price on the market page is your best indicator of the "consensus fixed rate" for that pool. The maturity target line on the chart shows the current LP position value — your PT converges toward this value, not a fixed $1.00.

Related

• Pricing Math — the AMM invariant and virtual reserves
• Trade PT — how to buy and sell PT
• Principal Token — what PT is and how it works