About

Yield Protocol is an Ethereum-based protocol for collateralizing fixed-rate, fixed-term loans. To achieve its goals, Para uses a class of tokens called fyTokens (Fixed Income Tokens). fyTokens are Ethereum-based ERC-20 tokens that can be redeemed one-to-one for the underlying asset after a predetermined maturity date. For example, if you have one fyUSDT token, you can exchange it for one USDT after the expiration date.

fyTokens do not pay interest, but instead trade at a discount to their redemption value (like a zero-coupon bond), providing a profit at maturity when redeemed for their full face value. Interest rates can be calculated based on the difference between the discounted present value and the value at maturity of the underlying asset. You can learn more about fyTokens by reading the original ParaFinance white paper.