Pendle uses a standardized yield wrapper, called SY, as the common interface to positions whose accounting differs across protocols. The wrapper holds the underlying exposure; principal tokens and yield tokens are minted from it. This lets Pendle support, for example, both rebasing assets and assets whose exchange rate increases. The wrapping ratio and supported redemption assets must still be checked for each market. A shared interface makes positions easier to integrate, but it does not make their collateral, withdrawal, or upgrade risks identical.

A principal token, or PT, has a maturity and a defined accounting asset. Buying it below its maturity redemption value can establish a fixed yield in that accounting unit, subject to the underlying position functioning as expected. The unit matters: a PT associated with a token whose exchange rate rises may redeem for one unit of accounting value through that token, rather than one whole unit of the appreciating token itself. Selling before maturity also exposes the holder to prevailing market prices and liquidity.

A yield token, or YT, receives the relevant yield until maturity. Its purchase price is paid upfront, so a positive stream of income does not by itself establish a profit: total collected value must be compared with the acquisition cost and fees. After the income window closes, no future yield remains attached to the expired YT, although earned amounts may still be claimable. This makes YT exposure sensitive to changes in realized yield and remaining time. Campaign points, where supported, are also different from guaranteed monetary income.