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  1. Home
  2. /Glossary
  3. /Yield Stripping
Back to Glossary
defi

Yield Stripping

Separating an interest-bearing asset into its principal and yield components so each can be traded independently.

Definition

Separating an interest-bearing asset into its principal and yield components so each can be traded independently. Pendle Finance pioneered this in DeFi, letting you trade future yield as a token. You can lock in fixed rates or speculate on whether yields will rise or fall.

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Related Terms

Yield

The income earned on an investment, expressed as a percentage.

DeFi (Decentralized Finance)

Financial services built on blockchain without traditional intermediaries.

Token

A digital asset created on an existing blockchain rather than its own chain.

1inch

A DEX aggregator that splits trades across multiple decentralized exchanges to find the best overall price.

Aave

One of the biggest lending and borrowing protocols in DeFi.

Across Protocol

A cross-chain bridge that uses an optimistic verification system and a network of relayers to move tokens between chains quickly.

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