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Yield Tokenization Strategies Meaning

Yield tokenisation strategies involve packaging the future revenue or interest generated by an asset into a token that can be bought, sold, or used as collateral. In the DeFi space, yield-bearing assets such as deposits in lending protocols or staked tokens can be tokenised; the resulting tokens represent claims on future yields.

For example, protocols like Notional Finance issue fTokens representing fixed-term loans, while others create tokenised tranches of yield with varying risk and return profiles.

Yield tokenisation enables investors to trade or hedge yield exposure separately from the underlying asset, improving liquidity and opening new strategies.

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