Constant Yield Tokenization System

An implementation of the "Split the Yield, Share the Risk" framework for yield tokenization in Solidity. This system allows users to decompose yield-bearing assets (ERC-4626) into Principal Tokens (PT) and Yield Tokens (YT), and trade them to achieve fixed interest rates.

Overview

Yield tokenization is a mechanism that separates a yield-bearing asset into two distinct components:

1. Principal Tokens (PT): Represent the right to redeem the underlying principal asset at maturity.
2. Yield Tokens (YT): Represent the right to collect all yield accrued by the underlying asset until maturity.

Architecture & Optimization

1. Minimal Proxies (EIP-1167)

To minimize gas costs, the system uses a factory pattern with Minimal Proxies. Instead of deploying a full contract for every new maturity, the YieldTokenizer clones pre-deployed singleton implementations.

2. YieldTokenizer (src/YieldTokenizer.sol)

The central engine that manages tokenization, redemptions, and yield accounting.

3. AMM & Fixed-Rate Discovery (src/amm/)

• YieldPool.sol: A specialized pool for PT/Underlying trading.
• YieldAMMFactory.sol: Factory for deploying liquidity pools for specific PTs.
• FixedRateQuoter.sol: Calculates market-implied fixed APRs based on PT prices.

Getting Started

Build & Test

cd Constant_Yield_Solidity
forge build
forge test -vv

Fixed-Rate Synthesis

By selling Yield Tokens (YT) or buying Principal Tokens (PT) at a discount in the AMM, users can effectively "lock in" a fixed interest rate. The FixedRateQuoter provides the real-time implied APR: $$APR = \left(\frac{1}{P_{PT}} - 1\right) \times \frac{365}{\text{days to maturity}}$$