Here's a breakdown on navigating YT and PT markets — using Solstice as the case study on Exponent.

Yield Tokens (YT) and Principal Tokens (PT) represent two sides of the same asset. Understanding their price dynamics matters if you're trading tokenized yield products. The original thread walks through market reading basics, but let me put it differently.

When you split an interest-bearing asset, YT captures future yield while PT locks in the principal. Their pricing reflects market expectations about rates, time decay, and volatility. Solstice implements this on Exponent's infrastructure, creating tradable positions around yield predictions.

Key mechanics? PT trades at a discount to underlying value — that spread represents implied yield. YT pricing gets trickier since it's purely speculative on future returns. Market efficiency isn't guaranteed in these pools. Opportunities emerge when implied rates diverge from spot markets.

Worth checking if you're exploring structured yield strategies beyond standard staking.