Yield Strategies
Earning Fixed Yield / Taking a Short Position on Yield (Buying PT)
Zenlink Eden enables you to earn fixed yield on various assets. This fixed yield can be redeemed at maturity. Note that your position is not locked; you can exit at any time before maturity, but the yield is not guaranteed if you choose to exit early and will fluctuate based on market sentiment.
Fixed yield positions on Zenlink Eden are PT (Fixed Yield) positions. Therefore, buying PT is equivalent to seeking fixed yield (or hedging against asset yield if you believe yields will decrease). Since you are guaranteed to receive the underlying asset at maturity, buying PT effectively locks in your APY at the current implied yield. Another way to view this is that you are fixing your yield at the current implied yield.
For example, if you buy a 1-year PT-vDOT at a 5% implied yield, each DOT spent on PT will yield 1.05 DOT at maturity and redemption.
Exiting your fixed yield position on Zenlink Eden before maturity involves selling PT on Zenlink AMM. While PT prices should generally rise over time, this is not guaranteed, so exiting before maturity does not ensure fixed yield.
Entering/exiting fixed yield positions is equivalent to buying/selling PT on Zenlink AMM, and trades will have price impacts affecting the received fixed yield amount. Larger trades will have larger price impacts, and the displayed fixed yield will change based on the input amount.
In summary, earning fixed yield is equivalent to buying PT. Whether holding PT until maturity or exiting early, the primary function used is the Swap function on Zenlink Eden.
Guide
Select your desired asset
Switch to the Swap-PT interface (after selecting an asset, you will default to this interface, no need to switch or take extra steps)
Select the asset you want to exchange for PT and enter the amount
Submit the transaction
Once the transaction is successful, you will receive the desired amount of PT, which you can hold until maturity to redeem at a 1:1 ratio for the underlying asset (e.g., 1 PT-vDOT = 1 DOT at maturity) or exit early by selling PT. For detailed instructions, refer to the App Guide.
Taking a Long Position on Yield (Buying YT)
In contrast to earning fixed yield/taking a bearish position on yield, if you believe that asset yields will rise, you may want to go long and bet on yields. This can be achieved by buying YT, where you only pay for the yield portion, increasing your exposure to asset yields. Your return will depend on the fluctuation of the Underlying APY.
Additionally, buying YT is more capital efficient than buying the underlying asset, meaning you can buy more YT with the same capital, thereby compounding your exposure to yield.
For example, if YT costs 5% of the underlying asset's price, any increase in the underlying yield will result in a 20x return (since you can buy 20 times more YT units with the same capital).
After buying YT, you will continuously accumulate the yield generated by the asset until you sell your position or reach maturity. At maturity, YT is worth $0 as it no longer generates yield.
In summary, taking a bullish position on yield is equivalent to buying YT. Whether accumulating yield until maturity or exiting early, the primary function used is the Swap function on Zenlink Eden.
Guide
Select your desired asset
Switch to the Swap-YT interface
Select the asset you want to purchase YT with and enter the amount
Submit the transaction
Once the transaction is successful, you will receive the desired amount of YT, which you can hold to continuously accumulate yield until maturity or exit early by selling YT. For detailed instructions, refer to the App Guide.
Providing Liquidity
You can earn yield by providing liquidity to Zenlink Eden, facilitating trading. Unlike "earning fixed yield," the yield from providing liquidity fluctuates based on the weekly allocation of ZLK to the pool and the total deposits in the pool. Note that your position is not locked, and you can withdraw at any time before maturity.
Providing liquidity on Zenlink Eden also involves minimal impermanent loss (IL). Based on our research, the highest IL observed on Zenlink Eden is 0.85%.
Liquidity Framing positions on Zenlink Eden are equivalent to LP positions. To provide liquidity and receive LP, use the Add function on Zenlink Eden. To exit LP positions, use the Remove function.
Guide
Select the asset you want to provide liquidity for
Switch to the Add interface
Choose between Zap In or Manual mode (see "FAQ-Providing Liquidity" for the differences)
Select the asset you want to add to the liquidity pool and enter the amount (choose whether to use zero slippage mode; see "FAQ-Providing Liquidity" for details)
Submit the transaction
Once the transaction is successful, you will receive the corresponding LP position (and corresponding YT amount, depending on whether you used zero slippage mode in Zap In mode). For detailed instructions, refer to the App Guide.
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