Fixed yield on XRPL, explained.

XRPL now has native on-chain credit via XLS-65 (SingleAssetVault) and XLS-66 (LendingProtocol). An issuer opens a vault, a broker originates fixed-term loans from it, and depositors earn the interest. One piece was missing: a secondary market. Once you deposit, you're locked until maturity. No early exit, no way to price each broker's credit quality, no yield curve.

Wift splits a deposit into two tradable instruments. You lock one vault share and receive one Principal Token (PT) and one Yield Token (YT). Both trade independently on the native XRPL DEX. PT lets you lock a fixed rate. YT lets you take a leveraged view on yield. Together they add up to the original share.

This pattern has a long history. US Treasury STRIPS solved the same problem in 1985. Pendle brought it to EVM DeFi. Wift brings it to XRPL, composed strictly from native ledger primitives — no smart contracts, no sidechain, no external oracles.

Every loan position is really two bets mashed together:

• Principal risk — will I get my money back?
• Yield risk — how much interest will I actually earn?

Most DeFi holders don't want both. A treasurer wants predictable principal; a speculator wants yield upside. Today they're forced to hold both at the same time. Splitting the position lets each side trade the piece they actually care about and hand the rest off at a price.

The result is a cleaner risk market. The PT price reveals the broker's fixed rate. The YT price reveals the market's expected yield above par. Both prices are public, live, and compose with anything on XRPL.

A Principal Tokenrepresents the right to recover the vault's principal at maturity. Concretely, at maturity time T each PT redeems to:

payout(PT) = min(1, NAV_T) · underlying

If the vault didn't take a loss (NAV_T ≥ 1), you recover exactly 1 unit of underlying per PT. If the vault defaulted andNAV_T < 1, PT holders absorb the principal haircut — this is the standard STRIPS waterfall.

Because PT pays a fixed amount in the good case, its trading price on the order book is the implied fixed rate. A PT that trades at 0.95 XRP with 90 days to maturity has an implied yield of roughly 22% APR — you pay 0.95 now and receive 1.00 later.

Use PT to lock a rate. Buy PT once, hold to maturity, redeem. No management, no keeper, no re-signing of positions.

A Yield Token represents the right to the yield accrued above par at maturity. Each YT redeems to:

payout(YT) = max(0, NAV_T − 1) · underlying

YT only pays when the vault outperforms par. IfNAV_T ≤ 1, YT is worthless. If the vault significantly outperforms, YT can multiply in value because the entire upside above 1.00 lives on this leg.

YT is cheap in absolute terms (a few percent of a unit), so a small capital outlay gives you a leveraged exposure to the broker's performance. It's the crypto-native equivalent of a zero-coupon claim on the yield spread.

Use YT to speculate on yield. Buy YT if you expect the broker to over-perform. Sell YT if you're long the underlying vault and want to lock a rate today.

Wift is built around one hard rule enforced at the ledger:

shares_locked == PT_supply == YT_supply

For every locked vault share sitting in the Wift wrapper, there is exactly one PT and one YT in circulation. No hidden mint. No inflation. No partial backing.

If you hold both a PT and a YT of the same series, you effectively hold the underlying vault share — the two legs reconstruct the whole. You can redeem the pair at any point after maturity and recover the share 1:1, regardless of NAV. This is what makes the construction market-neutral: whoever is holding both legs is exactly where they'd be if they had never split.

Once a series reaches its maturity timestamp, the wrapper opens a redemption window. There are three paths depending on which legs you hold:

• Full redeem (PT + YT)— you turn in equal amounts of both and get back the exact number of vault shares you locked. NAV doesn't matter; you're market-neutral.
• PT-only redeem — you sold your YT and only hold PT. You receive min(1, NAV_T) per PT. If the vault is solvent, you get your principal back in full; if not, you take the hit.
• YT-only redeem — you only hold YT. You receive max(0, NAV_T − 1)per YT. Pure yield. Non-zero only if NAV > 1.

Redemption is signed by the 3-of-5 multisig of independent relayers that run the Wift wrapper. Every signature is publicly verifiable on the ledger.

For each broker, Wift reconstructs a full term structure by plotting the YTM implied by each series' PT spot price against its maturity:

YTM = (1 / PT_price)^(365 / days_to_maturity) − 1

One broker becomes one curve. Three brokers become three curves stacked vertically — safe on the bottom, medium in the middle, risky on top. The distance between curves is the credit spread, and it updates in real time as orders hit the book.

Credit curves are the primitive that fund managers, treasurers, and risk desks need to price on-chain credit the way they price any other bond market. Before Wift they didn't exist on XRPL.

Bob locks a fixed 7.4% APR

Bob has 982 XRP and wants predictable return. He doesn't want to deposit into a vault because he doesn't want to pick a broker and doesn't want variable yield. He just wants a known outcome.

Bob buys 1,000 PT-safe-90d at 0.982 XRP each → spends 982 XRP → waits 90 days → redeems 1,000 PT for 1,000 XRP Net: +18 XRP on 982 XRP over 90 days ≈ 7.4% APR fixed

Alice sells her yield to lock today

Alice deposited 1,000 XRP into a medium broker and received 1,000 vault shares. She's nervous about the broker's repayment schedule and wants to cash out the expected yield right now.

Alice splits: 1,000 shares → 1,000 PT + 1,000 YT Alice sells 1,000 YT on the book → 16 XRP cash Alice still holds 1,000 PT → waits 90 days → redeems 1,000 PT for 1,000 XRP Net: +16 XRP cashed early + 1,000 XRP at maturity ≈ 6.4% APR fixed, broker performance no longer her problem

Carol buys Alice's yield and wins big

Carol is bullish on the broker. She thinks the real yield will be 10% APR, not the 6.4% implied by the current YT price.

Carol buys 1,000 YT at 16 XRP Broker over-performs: NAV_90d settles at 1.025 Carol redeems 1,000 YT for 25 XRP Net: +9 XRP on 16 XRP in 90 days ≈ +56% ROI

Downside for Carol: if the broker had defaulted, her YT would have been worth zero. High leverage, high variance.

• Broker default. If the underlying broker defaults on enough loans to drag NAV below 1, PT holders absorb the principal loss and YT goes to zero. Wift does not guarantee principal.
• Liquidity at bootstrap. Early in a series' life the order book may be thin and slippage high. The seeded initial order compensates but market depth grows over time.
• Multisig relayers. Wift v1 trusts 3-of-5 independent signers to enforce the invariant. Collusion of 3 is the theoretical trust assumption. v2 will migrate to a native XLS-101d smart contract once that primitive is live upstream.
• Maturity timing. YT needs NAV above 1 at maturity, not somewhere along the way. A vault that was outperforming at day 30 but defaulted at day 89 leaves YT worthless.
• Rate convexity. Long-dated PT has more rate sensitivity than short-dated PT. Secondary price swings can be larger than the spot rate implies.

Can I exit before maturity?

Yes — sell your PT and/or YT on the order book. Early exit is a pure trade; you're selling to another holder at the current market rate, not calling the vault. Liquidity depends on the book depth at that moment.

Do I need to KYC?

Wift itself is permissionless. Some brokers may use XLS-70 Credentials to restrict participation to KYC'd addresses — that's a broker-level choice and will be labelled clearly on the series card.

What assets can underlie a Wift series?

Anything XRPL supports as a vault asset: XRP, IOUs (e.g. RLUSD when available), or MPTs. v1 of Wift trades all PT/YT IOUs against XRP on the native DEX.

Who runs the 5 relayers?

For the hackathon, five keys are held by the Wift team itself with social commitment. For production, the plan is to transition to independent operators drawn from the XRPL community with a public signer list and rotation procedure.

What makes this different from Pendle?

Pendle is a smart contract platform on EVM. Wift is a composition of native XRPL primitives — vaults, MPTs/IOUs, AMM, multisig, Batch. There is no Wift contract to audit. The ledger itself enforces the mechanics. When XLS-101d lands, Wift can migrate the wrapper to a contract without breaking existing holders.