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Implied Yield

Overview

The implied yield is the annual rate of return of the underlying asset implied by the market, through the current price to trade YT.
The price of YT fluctuates according to market demand and can be used as an indicator of market sentiment towards yield. However, the price of YT decays over time, so it is difficult to measure the rate of return of its transaction from the price. The implied yield allows quick comparison between the YT price and the current yield of the underlying asset.
For example, if the implied yield of dYT-dUSDC-1.5Year is 13.2%, the market generally believes that the yield of USDC in Dank is 13.2% per year in a period of a year and a half.

Design of Interest Rate Mechanism

  • Anticipation
  • Historical Data Prediction
  • Model Fitting