Question on the fixed yields on stablecoins. Using the gDAI example, the fixed APY is 8.3%. Setting aside the risk of being counterparty to traders on Gains Network. If I purchase the principal token and hold it for 6 months, can I sell that token and lock in 4.15%?
Great question. So when you buy the pt-gDAI token you lock in the yield in the sense that the pt-gDAI tokens appreciates in price until it reaches the price of gDAI itself at maturity. The yield you are receiving therefore comes from the price appreciation. If you sell it halfway through the maturity then yes you have received half the yield as the pt token has gone up 50% to gDAI
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Question on the fixed yields on stablecoins. Using the gDAI example, the fixed APY is 8.3%. Setting aside the risk of being counterparty to traders on Gains Network. If I purchase the principal token and hold it for 6 months, can I sell that token and lock in 4.15%?
Great newsletter!
Great question. So when you buy the pt-gDAI token you lock in the yield in the sense that the pt-gDAI tokens appreciates in price until it reaches the price of gDAI itself at maturity. The yield you are receiving therefore comes from the price appreciation. If you sell it halfway through the maturity then yes you have received half the yield as the pt token has gone up 50% to gDAI