Where does pendle yield come from?

Yield Tokenization is a revolutionary concept that PENDLE employs to revolutionize the way investors interact with yield-bearing assets. By utilizing the SY (Standardized Yield) token standard, Pendle has created a unique system that allows for the efficient and secure tokenization of yields.

SY tokens, at the core of Pendle's platform, are wrapped tokens designed specifically for leveraging on the Pendle protocol. These tokens consist of two essential components: Principal Tokens (PT) and Yield Tokens (YT). This dual-component structure ensures that investors have clear visibility into both the principal investment and the associated yield.

The Principal Tokens (PT) represent the underlying asset that generates the yield. These tokens maintain the same value as the original asset, providing investors with a secure and transparent way to track their investment.

Complementing the Principal Tokens are the Yield Tokens (YT), which represent the yield generated by the underlying asset. These tokens enable investors to directly trade and leverage the yield, opening up new opportunities for profit and diversification.

Pendle's use of the SY token standard has made it possible for any yield-bearing asset to be wrapped into an SY token. This flexibility allows investors to access a wide range of assets and strategies, all within a single, user-friendly platform.