PT (Pendle Principal Token)
In one sentence
PT (Principal Token) on Pendle represents the principal of a yield-bearing asset and is redeemable 1:1 for the underlying at maturity. It trades at a discount that converges to par, giving holders a fixed yield.
What it actually means
Pendle takes a yield-bearing asset (like stETH, sUSDe, or weETH) and splits it into two tokens for a fixed period: a Principal Token (PT) and a Yield Token (YT). PT represents the right to redeem 1 unit of the underlying at maturity. YT represents the right to claim all the yield generated until maturity.
Because PT does not earn yield itself, it trades at a discount to the underlying. As maturity approaches, the discount shrinks and PT price converges to 1.0 in underlying terms. Holding PT to maturity locks in a fixed yield: the discount you bought it at, annualized.
How it works
You buy 1 PT-sUSDe maturing in 180 days for 0.95 sUSDe. At maturity, you redeem 1 sUSDe. Profit: 0.05 sUSDe on a 180-day horizon = roughly 10.7% APY, fixed, regardless of what happens to the variable sUSDe rate in between.
Why it matters to you
PT is one of the few ways to lock in a fixed yield on a variable-yield asset on-chain. It is attractive when you believe variable rates will fall, or when you simply want predictability for treasury or hedging purposes. The trade-off is liquidity (you may need to sell before maturity at the prevailing PT price) and underlying risk (if sUSDe or stETH depegs, PT does too).
- PT before maturity: trades on the open market, price moves with implied rate.
- PT at maturity: redeemable 1:1 for the underlying.
- PT after maturity: still redeemable, but no longer earning yield. Action required.
- PT during underlying depeg: discounted further or harder to exit.
Real example
On April 1 you buy 100 PT-weETH maturing on July 1 (90 days) at 0.978 weETH each. You pay 97.8 weETH and own 100 PT-weETH. Fixed yield = (1/0.978 − 1) × (365/90) ≈ 9.1% APY in weETH terms. On July 1, you redeem 100 weETH. If weETH drifted, PT mid-life price may have moved, but holding to maturity gives the locked-in yield.
What happens after maturity
Once a PT reaches maturity, it stops earning. It is still redeemable for 1 unit of the underlying, but the underlying is no longer earning the contracted yield through Pendle (the SY token continues to earn the native variable yield once redeemed). Forgotten PTs sitting past maturity are an opportunity cost: holding them rather than rolling or redeeming forgoes the yield they could otherwise capture. Maturity reminders are the single most actionable Pendle alert.
PT trading vs holding
PT can be traded any time before maturity. If implied rates drop after you buy, your PT price rises (you can sell for a profit). If rates rise, your PT trades at a deeper discount and exiting before maturity locks in a loss versus the fixed yield you signed up for. PT is therefore both a fixed-yield instrument (if held to maturity) and a duration-sensitive asset (if traded). This dual nature is what makes it interesting for users with a rates view.
How Otomato monitors it
Otomato detects every PT you hold on Pendle and tracks implied rate changes, maturity dates, and the security of the underlying asset. You are alerted before maturity (so you can decide whether to roll, redeem, or sell), when implied rate moves meaningfully, and immediately if the underlying or Pendle itself shows a security signal.
Related terms
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