Behind the scenes lending

To lend at a fixed rate, you simply buy fyTokens at a discount from their face value. The discount you get is equivalent to locking a fixed return, which can be calculated according to time until a fyToken can be redeemed. For example, if you buy 100 fyUSDT expiring in December 2021 at 98.8 USDT on September 31, 2021, you will receive an implied interest rate of 5% APR. fyToken can be held until the maturity date, at which time the principal plus interest can be redeemed. You can also exit your lending position early by selling your fyToken for the underlying asset. Since fyToken is freely traded, changes in interest rates may affect the amount of underlying assets you get when you redeem early. In order to compensate the lenders who did not redeem fyToken immediately, they began to earn interest in the form of an increased redemption rate after maturity.

Maturity

If you own fyUSDT after maturity, you may earn interest after maturity. Currently, you will start earning the Compound USDT lending rate on your fyUSDT until you decide to redeem it for USDT. Other fyTokens (such as fyFRAX) do not pay interest.