Pendle PT/YT Tracking: One Asset Split Into Two, With a Clock

Pendle takes a yield-bearing asset and cuts it in two — a principal claim and a yield claim — both ticking toward a maturity date. Track them as two ordinary tokens and you mis-value a discounted PT, a decaying YT, and lose the link between them. This guide is the PT/YT model and its maturity dynamics.

TL;DR

• Pendle splits a yield-bearing asset into PT (Principal Token) + YT (Yield Token) with a shared maturity.
• PT redeems 1:1 for the underlying at maturity; before maturity it trades at a discount (narrowing toward maturity).
• YT carries the future yield until maturity, then decays toward zero.
• Do not value PT at par before maturity — use the discounted price + the maturity clock.
• PT+YT is one decomposition of a single underlying — keep the relationship, not two unrelated tokens.
• Tax is jurisdiction-specific — track mechanics, confirm tax separately. Decomposition discipline as #141.

One asset, two tokens, one clock

Pendle is a yield-tokenization protocol. It splits a yield-bearing asset into:

• PT (Principal Token) — the principal portion, redeemable 1:1 for the underlying at maturity, trading at a discount before then;
• YT (Yield Token) — the right to the asset's future yield until maturity.

Both share a maturity date, and that date governs their values. A PT/YT holding is not "two tokens" — it is a time-bound decomposition of one economic source.

PT: discounted until maturity

The defining PT property: it redeems 1:1 for the underlying only at maturity. Before maturity it trades at a discount that narrows as maturity approaches. The tracking error to avoid: marking PT at par early, which overstates the position. PT's value is the discounted market price until maturity, then par — a tracker must apply the time-to-maturity dynamics, not face value.

YT: a decaying claim

YT carries the yield until maturity. As maturity nears, the remaining yield it represents shrinks, so YT trends toward zero at maturity (and stops generating yield then). A portfolio view must model YT as a decaying, time-bound claim — not a stable token. Holding YT past maturity is holding something with no remaining yield rights, a state a naive tracker will still show as a balance.

Keep PT and YT linked

Splitting into PT+YT, trading either, and redeeming/settling at maturity are linked events on the same underlying. Tracking must preserve the relationship and the maturity clock, not treat PT and YT as unrelated holdings — the same "decompose, keep the lineage" rule as DeFi position reconciliation.

Tax is jurisdiction-specific

Whether the split, secondary trading of PT/YT, yield received via YT, or redemption at maturity is a taxable event is framework- and jurisdiction-specific and must not be assumed (see cost-basis methods and yield farming tracking). The split/discount/decay/maturity mechanics are the tracking layer; the tax characterisation is separate and adviser-confirmed.

Practical guidance

1. Model PT+YT as one decomposition of an underlying, with a shared maturity.
2. Value PT at its discounted price until maturity — never par early.
3. Model YT as a decaying claim trending to zero at maturity.
4. Track the maturity clock — values are time-dependent, not static.
5. Confirm tax treatment of split/trade/yield/redemption per jurisdiction.
6. Reconcile PT/YT and maturity events to Pendle with an audit trail.

How vendor tools handle Pendle

Koinly and Zerion model yield-tokenization positions. Confirm the tool treats PT+YT as a linked decomposition, discounts PT before maturity (not par), models YT decay to zero, and tracks the maturity events — valuing PT at face value early or unlinking PT/YT is the recurring Pendle error.

How Wag3s helps

Wag3s Folio models a Pendle position as a linked PT/YT decomposition of one underlying, values PT at its discounted market price until maturity, models YT decay to zero, tracks the maturity clock and settlement, and surfaces the data for the jurisdiction-specific tax characterisation. See the Folio product page.

Further reading

• Uniswap V3 LP Position Tracking
• DeFi Position Reconciliation
• Yield Farming Tracking
• Liquid Restaking Token Accounting (LRTs)
• Crypto Cost Basis Methods 2026
• DeFi Lending Position Tracking

Sources

• Pendle documentation/academy — yield tokenization: a yield-bearing asset is split into PT (principal) and YT (yield)
• PT redeemable 1:1 for the underlying at maturity, trades at a discount before maturity; YT carries future yield until maturity and stops yielding (value → ~0) at maturity
• PT/YT as a time-bound decomposition of one underlying (linked events; maturity-driven values)