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When a user deposits supported collateral into Strip, they receive Principal Tokens (PT) representing their deposited value. The Principal Token is the user’s claim on principal: nothing more, and nothing less.

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What a Principal Token is

  • A liquid claim. Principal remains withdrawable through the vault. There is no maturity date, no expiry, and no withdrawal queue.
  • Vault-specific. Each vault issues its own Principal Token. PTs are never pooled across different underlyings, so a PT’s risk profile is exactly the risk profile of its own collateral.
  • Composable. PTs can be held, transferred, staked for STRIP emissions, or supplied as PT/STRIP liquidity.

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What a Principal Token is not

  • Not a lockup. Deposits can exit at any time via the vault mechanics.
  • Not a maturity product. There is no fixed term and nothing to roll over.
  • Not a yield-bearing wrapper. While the collateral continues to generate yield inside the system, that yield is separated from the principal and routed through Strip; it does not accrue to the PT.

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The depositor’s trade, stated plainly

Holding a PT means routing 100% of your collateral’s yield into the loop and competing for STRIP emissions instead. The arithmetic every depositor should run is simple: the position makes sense while the value of your emissions, at a STRIP price you consider realistic, exceeds the underlying yield you are forgoing. Two things move that comparison in the depositor’s favor: Lockless Boost, which can multiply an aligned participant’s share of emissions up to 20x over 60 days, and the decaying emission schedule, which concentrates distribution on early, sustained participants. One thing moves against it: STRIP’s market price is not guaranteed. See Risks for how this trade behaves when markets move. Strip’s position is that this trade should be legible, not obscured. The docs state it; the app shows accrued rewards directly; and during Genesis, when STRIP has no market price, the APR you see is computed from a valuation you set yourself.

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The core distinction

Most yield systems ask users to deposit capital and wait for the payout. Strip inverts this: the depositor keeps a liquid claim on principal, and the output of that capital is routed into the STRIP loop: half to buyback and burn, half compounding the collateral base. In exchange for routing their yield, PT holders compete for STRIP emissions. Staked PTs earn emissions directly; PTs supplied as PT/STRIP liquidity deepen the market around deposited collateral and STRIP. The principal claim remains intact. The yield does the work.