Overview
A yield token is a token representing a yield-bearing position, such as a vault or lending receipt. It accrues value as the underlying earns returns. Yield tokens make positions composable.
How It Works
Depositing assets mints a yield token that tracks the position’s value including earned yield. It can be held, traded, or used as collateral. The redemption value grows over time.
Why It Matters
Yield tokens unlock capital efficiency by making earning positions liquid and usable. They are central to yield aggregators and lending. Their value depends on the underlying strategy.
Related Concepts
Yield tokens relate to Yield Vaults, Lending, and stETH. They represent earning positions in DeFi.