PT vs YT Complete Guide: How to Farm APR, Points and Airdrops with Yield Tokenization in DeFi

If you have used protocols like Pendle, Nemo Protocol or Spectra, you have probably seen these two tickers everywhere:

• PT (Principal Token)
• YT (Yield Token)

Most people understand that they are related to farming, but not exactly:

• What each one represents
• Which one is “safer”
• How they affect points and airdrops
• How to build a strategy around them

In this guide, I’ll walk you through:

• What yield tokenization is
• The difference between PT and YT
• How leverage works with YT
• Conservative, aggressive and mixed strategies
• Risks you need to understand before aping in

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1. Yield Tokenization: splitting principal and yield

The core idea is simple:

When you deposit a yield-bearing asset (LSD, LST, vault token, etc.), the protocol splits it into two parts:

• PT (Principal Token) → represents the base value of your deposit
• YT (Yield Token) → represents the future yield until a specific maturity date

Until maturity:

• PT usually trades around the base value with some discount or premium
• YT represents the right to receive the future yield of that position

At maturity:

• PT goes back to 1:1 with the underlying asset
• YT stops generating yield and tends to zero in value

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2. PT – Principal Token 🏦

The PT is the “safe” leg in the structure.

Think of it as a bond:

• If you hold it until maturity, you redeem it for the underlying asset 1:1
• Often offers an attractive fixed or predictable APR

Typical PT characteristics:

• Higher or more stable APR than the base protocol
• Usually does not earn points or airdrops
• Lower volatility compared to YT
• Ideal for users who want yield with moderate risk

📌 PT in one sentence:
You sacrifice airdrop upside in exchange for more predictable interest.

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3. YT – Yield Token 💹

The YT is the “farming” and degen leg.

It represents the future yield of the position until maturity and concentrates:

• Protocol points
• Potential airdrops
• Leverage on farming

Typical YT characteristics:

• Lower base APR than PT
• Does receive points and airdrops
• Theoretical value decays over time as less yield remains
• But can appreciate if demand increases

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4. YT price dynamics: it does not always go down

In theory:

• As time passes, less yield is left
• The YT should lose value and trend towards zero at maturity

In practice:

• If the protocol launches strong point campaigns
• If airdrops are expected to be valuable
• If many users rush into YT to farm

Then demand rises and the YT price can actually go up.

Realistic scenario:

• You enter a YT position with leverage
• You farm points as if you had 8,000 dollars thanks to multipliers
• Demand for YT increases, its price goes up
• You might exit with both points and a capital gain on the YT itself

That’s the sweet spot.

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5. Leverage with YT: the points multiplier

One of the key attractions of YT is point leverage.

Example:

• A YT offers 80× points
• With just 100 dollars, you farm points as if you had 8,000 deployed

If:

• The airdrop actually pays off
• The value of the points is significant

… your return on capital can be huge.

📌 Conservative approach with YT:

• You enter with an amount you are willing to lose
• You farm points over weeks or months
• If your 100 dollars position drops to 50 dollars and you exit:
  • You lose 50 dollars
  • But keep all the points and airdrop exposure accumulated

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6. PT vs YT – Quick comparison

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7. Typical strategies with PT and YT

1) Conservative – PT only

• Focus on secure yield
• You do not rely on airdrop value
• Works like a crypto bond with a maturity date

2) Aggressive – YT only

• Focus on points, airdrops and leverage
• You accept you might lose a significant part of the capital
• You are betting that the airdrop will make it worth it

3) Mixed – PT + YT

• Some PT for baseline yield
• Some YT for upside and airdrops
• You can rebalance as maturity gets closer or market conditions change

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8. LP PT/YT – Providing liquidity

Many protocols also allow you to LP in PT/YT pairs.

What you earn:

• Swap fees
• Extra incentives from the protocol
• Sometimes additional points

What you risk:

• Impermanent Loss as PT and YT prices move differently
• More complexity in managing the position

This is usually for more advanced users.

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9. Main risks to keep in mind

PT/ YT structures are powerful, but not risk free:

• Smart contract risk
• Protocol design risk
• Airdrop value being lower than expected
• Illiquidity when you want to exit the YT
• Not understanding maturity dates and timelines

As always: DYOR, size your positions properly and treat YT exposure as speculative.

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10. Conclusion

• PT is your “bond” leg: higher and more stable yield, fewer surprises, less upside from airdrops.
• YT is your “farming” leg: points, airdrops, leverage and volatility, with real downside risk.
• Combining both allows you to build a strategy that matches your risk tolerance.

If you want to play the points and airdrop meta like a pro, really understanding PT vs YT is mandatory.

If this guide made things clearer for you, save it and share it with anyone starting to use Pendle, Nemo or any other yield tokenization protocol. 🚀