# Introduction to Timeless NYT and PYT Course 1 -- 20-minute ## About this Course Get started minting PYT and NYT on [Timelessfi.com](https://timelessfi.com/mint), the basic building blocks of each Timeless' yield market. PYT, or Perpetual Yield Token, is a new DeFi primitive you will use to speculate and earn an organic boosted yield on an underlying asset. Use NYT, or Negative Yield Token, to speculate or hedge against yield drop on the underlying. Whether you are looking for a way to boost passively your yield or planning to start a career in yield rates trading, learning about PYT and NYT is a great place to start. ### What you'll learn - Define PYT and NYT - Mint PYT and NYT - Build a short or long position by trading PYT or NYT. - Learn the structural foundation of Timeless' yield tokens pricing. At the completion of this course, make sure to join the Timeless Guild by visiting the [#start-here](https://discord.gg/MncaVpY9ZV) channel on the Timeless Discord server. You'll get a "Yield token holder" role that will allow your to mint a special NFT. Store it safely. You may need it later ;-). ## Getting familiar with PYT and NYT At its core, Timeless' yield markets are powered by the following Yield Tokens. ### Perpetual Yield Token (PYT) PYT lets you **speculate and earn a boosted yield** by up to 2x multiplier on an underlying assets ad infinitum. PYT goes up in price when the yield rate goes up. A wrapped version of PYT exists, code-named xPYT. It auto-compounds your yield while PYT does not. ### Negative Yield Tokens (NYT) NYT lets you **speculate or hedge against yield drop** on the underlying assets. The price of NYT moves opposite to how the yield rate moves. If the rate goes up, NYT price goes down; if the rate goes down, NYT price goes up. ## How does Timeless yield token minting work? You can provide assets to Timeless (e.g. 100 TKN) and mint PYT and NYT (e.g. 100 TKN-PYT and 100 TKN-NYT). Yield Tokens are minted and burned in a 1:1 ratio. Depositing 100 TKN into Timeless will mint 100 PYT and 100 NYT. Withdrawing 100 TKN from Timeless requires that 100 PYT *and* 100 NYT are burned. The TKN provided will be deposited into a farm (ie Lido, Yearn, and soon to be released Aave, Compound, Euler), and the yield earned can be claimed by the PYT holders. What this means is PYT + NYT together represents a claim on the underlying TKN + yield generated, while PYT alone represents only a claim on the *yield* generated by the underlying TKN. ## How does yield boosting work? Since PYT trades at a discount to the underlying asset, you'd be earning a higher yield rate than if you directly deposited your money into the farm (e.g. Aave). For instance, if you buy 1 PYT for 0.75 USDC, you would earn the yield produced by 1 USDC, so you'd be earning yield with a 1 / 0.75 = 1.33x multiplier. Holding xPYT instead of PYT works in the same way. ## How does yield hedging work? Suppose you have a yield-earning position somewhere (e.g. Aave) and you're worried that the yield rates might go down in the future. You can hedge against this risk by converting part of your portfolio into NYT. When the yield rate goes down, the price of NYT goes up, increasing your position's effective yield rate. ## Timeless' real magic The magic of Timeless begins when either PYT or NYT is sold. By holding either only PYT or only NYT, you can build either a long position or short position on yield rates. ## Minting PYT and NYT Minting PYT and NYT is easy. On the [Mint page](https://timelessfi.com/mint), you'll be greeted by an intuitive UI. ![](https://i.imgur.com/lKeHkww.png) Before you make your deposit, let's discuss each element on the page. The **FROM** field is where you select an asset and enter the amount you'd like to deposit. The **TO** field displays the amount of PYT and NYT you'll receive. Remember, for every TKN deposited you will reveive 1 PYT and 1 NYT. The **ADVANCED SETTINGS** dropdown features two additional options when minting. ![](https://i.imgur.com/W5o2dFp.png) **Use Vault Shares**: This option allows users to deposit a yield bearing asset (e.g. yvWETH) directly instead of the asset (WETH) itself. **Receive xPYT**: This option will mint xPYT instead of PYT and is enabled by default. xPYT is an auto-compounding version of PYT. ### The minting step by step In this example, we'll use WETH. 1. In order to mint PYT and NYT, first make sure to give permission to access your WETH by the Timeless' contract. To do so, click on the Approve button. ![](https://i.imgur.com/aGnnOry.png) 2. After the confirmation of the Approval transaction, click on the Mint button. ![](https://i.imgur.com/EzCp8n4.png) 3. Then you can check your minted yvWETH-(x)PYT and yvWETH-NYT balances on the [Portfolio page](https://timelessfi.com/portfolio). ![](https://i.imgur.com/zPaOFIt.png) ### Build a long position with PYT To create a long position on the yield rate of your WETH, you need to sell all your freshly minted WETH-NYT by heading to the [Swap page](https://timelessfi.com/swap). The first step is to input in the FROM field the yvWETH-NYT and in the TO field its respective yvWETH-(x)PYT, and approve the access to your NYT balance. ![](https://i.imgur.com/cTOb7mD.png) Then swap your whole NYT balance for the corresponding xPYT. By doing so, you'll get a long position with the maximum yield boost available for this yield market. ![](https://i.imgur.com/FrOn53c.png) ### Build a short position with NYT Rather than minting PYT and NYT and then swapping our NYT for PYT, you need to do the opposite. After minting, trade your whole (x)PYT balance for NYT. With Timeless, hedging against yield drops is as simple as that. ## How does Timeless price PYTs & NYTs? We laid out a model for determining the intrinsic value of PYTs and NYTs, and offered a set of justifications as to why the market price will follow this model in this 2 posts: - [Perpetual Yield Tokens: What they are and how to price them](https://blog.timelessfi.com/posts/pyt-pricing/) - [PYT pricing analysis: round 2](https://blog.timelessfi.com/posts/pyt-pricing-2/) ## Get your Timeless NFT Congratulations! To celebrate the start of your journey on Timless, get your exclusive NFT by joining the [Timeless Discord server](https://discord.gg/MncaVpY9ZV). You'll get a "Yield token holder" role that will allow your to mint a special NFT on Galaxy Eco **(Link required)**. Store it safely. You may need it later ;-).