Yield Token (YT) Strategies

What are Yield Token (YT) Strategies?

Yield Tokens (YT) represent the variable yield of a staked asset over a specific time period. Through looping, you can amplify your yield exposure by using SLF-provided stablecoins to stake more assets while paying a fixed predetermined rate to SLF.

Key Benefits:

• Leveraged Yield Exposure: Access yields from much larger positions than your capital alone allows

• Fixed Cost Structure: Pay predetermined rates regardless of actual performance

• Unlimited Upside: Capture all variable yields above your fixed payments

• Zero Slippage: OTC mechanism eliminates trading fees

How You Make Money from YT

The Profit Mechanism

• SLF acts as Principal Token provider: Supplies the stablecoins needed for amplified RWA staking

• You get variable yield exposure: Receive all actual yields from the leveraged position

• Fixed payment obligation: Pay predetermined fixed yield to SLF regardless of performance

• Your profit: Keep the spread between actual yields and fixed payments

Example with $10,000 and 3x leverage:

• Your capital: $100 in RWA assets

• SLF provides: $6,000 additional stablecoins for staking

• Total staked position: $6,100 worth of RWA assets

• You receive: All variable yields from $6,100 position (e.g., 25% = $1,525)

• You pay: Fixed rate to SLF on $6,000 funding (e.g., 12% annualized = $180 for 3 months)

• Your net profit: $1,525 - $180 = $1,345 vs $25 without leverage

Why extreme leverage works for YT:

• Short duration: 30-90 day positions reduce time-based risks

• Higher LTV ratios: YT strategies can support 95-99% LTV due to fixed maturity

• Amplified returns: Small capital generates massive yield exposure

Risk/Reward Profile

• Upside potential: Unlimited - capture all yields above fixed rate

• Cost certainty: Fixed predetermined payments regardless of market performance

• Key advantage: Access much larger yield-generating positions with known costs

Risk Considerations

• Fixed cost risk: In worst-case scenarios, you lose the predetermined interest payments to SLF

• Yield risk: Actual RWA yields may be lower than projected, reducing profits

• Limited principal risk: Unlike traditional lending, RWA price movements don't create additional losses beyond your initial capital and fixed payments

How YT Strategies Work

Step 1: Position Setup

Deploy a dedicated wallet contract for your YT position, ensuring complete asset isolation and transparent tracking of all your funds and yields.

Step 2: Leveraged YT Generation

System uses your RWA assets as collateral to borrow SLB, then converts to stablecoins through OTC mechanism. All trades are facilitated by Staple Exchange and funded by the Standing Lending Facility (SLF) at oracle prices, eliminating slippage costs.

Step 3: Yield Strategy Execution

YTHelper converts all stablecoins and RWA into staked RWA according to the yield strategy, executing the leverage loop to generate more YT exposure.

Step 4: Maturity Management

Unlike traditional looping, YT positions have fixed maturity dates. The system automatically handles position closure at maturity, settling all debts and distributing your net profits plus any accumulated rewards (such as points).