SY

SY is a token standard that implements a standardized API for wrapped yield-bearing tokens within smart contracts.

SY is a token standard (EIP-5115) written by the Pendle team that wraps any yield-bearing token and provides a standardized interface for interacting with any yield-bearing token’s yield generating mechanism. SY is a purely technical component, the user does not interact directly with SY.

SY implements a standardized API for wrapped yield-bearing tokens within smart contracts. All yield-bearing tokens can be wrapped into SY, giving them a common interface that can be built upon. SY opens up Splice's yield-tokenization mechanism to all yield-bearing tokens in DeFi, creating a permissionless ecosystem.

For example, stETH, cDAI and yvUSDC can be wrapped into SY-stETH, SY-cDAI and SY-yvUSDC, standardizing their yield-generating mechanics to be supported on Splice.

As all SYs have the same mechanism, Splice interacts with SY as the main interface to all yield-bearing tokens. PT and YT are minted from SY and Splice AMM pools trade PT against SY.

While this might seem daunting, Splice automatically converts yield-bearing tokens into SY and vice versa. This process happens automatically behind the scenes, making users feel as if they’re interacting directly with their yield-bearing tokens instead of having to manually deal with SY <> yield-bearing token conversion.

While this standard benefits Splice, our vision for SY extends beyond just our own protocol. SY aims to create unprecedented composability across all of DeFi, enabling developers to seamlessly build on top of existing contracts without the need for manual integration.