> ## Documentation Index
> Fetch the complete documentation index at: https://docs.exponent.finance/llms.txt
> Use this file to discover all available pages before exploring further.
# Strip & Merge
> Strip yield-bearing assets into PT and YT, collect yield, and merge back to the base asset
This page follows 1,000 USDC through every stage of the core Exponent flow: stripping into [PT](/developers/learn/emitted-tokens#pt-principal-token) and [YT](/developers/learn/emitted-tokens#yt-yield-token), collecting yield, and merging back to the base asset. Every code block uses the real Exponent Core SDK — for isolated copy-paste snippets, see the [SDK Quickstart](/developer-core/core-sdk).
## Setup
```typescript theme={null}
import { Vault, YtPosition, LOCAL_ENV } from "@exponent-labs/exponent-sdk";
import { Connection, PublicKey, Transaction, sendAndConfirmTransaction, Keypair } from "@solana/web3.js";
const connection = new Connection("https://api.mainnet-beta.solana.com");
const wallet = Keypair.fromSecretKey(/* ... */);
const vault = await Vault.load(LOCAL_ENV, connection, new PublicKey("..."));
// Scenario starting point
const rate = vault.currentSyExchangeRate; // 1.00
const maturity = vault.expirationDate; // 90 days from now
```
***
## Initialize a Yield Position
YT does not earn yield sitting in your wallet — it is just an SPL token. To start accruing interest and emissions, it must be deposited into a `YieldTokenPosition`. This is a one-time setup per vault, and must be done before calling `ixStripFromBase` (which auto-deposits YT).
```typescript theme={null}
// One-time: create a yield position for this vault
const initIx = vault.ixInitializeYieldPosition({
owner: wallet.publicKey,
});
await sendAndConfirmTransaction(
connection, new Transaction().add(initIx), [wallet]
);
```
***
## Strip
Stripping converts a base asset into PT and YT in one atomic instruction. The vault wraps the base into [SY](/developers/learn/emitted-tokens#sy-standardized-yield) under the hood, then mints equal amounts of PT and YT based on the current exchange rate. YT is automatically deposited into your yield position and begins accruing immediately.
At a rate of 1.00, depositing 1,000 USDC produces 1,000 PT + 1,000 YT.
```typescript theme={null}
const stripIx = await vault.ixStripFromBase({
owner: wallet.publicKey,
amountBase: 1_000_000_000n, // 1,000 USDC (6 decimals)
});
const tx = new Transaction().add(stripIx);
await sendAndConfirmTransaction(connection, tx, [wallet]);
const ytPosition = await YtPosition.loadByOwner(
LOCAL_ENV, connection, wallet.publicKey, vault
);
```
If you already hold SY tokens, use `vault.ixStrip({ syIn, depositor })` to skip the base-to-SY wrapping step. Note that `ixStrip` does not auto-deposit YT — you would need to call `ytPosition.ixDepositYt()` separately.
**Holdings: 1,000 PT + 1,000 YT (deposited)**
***
## Collect Yield
### Yield accrues over time
As the underlying protocol (e.g., Marginfi) earns interest, the [SY exchange rate](/developers/learn/emitted-tokens#sy-standardized-yield) grows. The deposited YT position tracks this growth.
| | Value |
| --------------------------- | -------- |
| Exchange rate at deposit | 1.000 |
| Exchange rate after 30 days | \~1.008 |
| YT deposited | 1,000 |
| Accrued interest | \~8.1 SY |
### Stage and collect
Before collecting, the yield must be staged — this snapshots the current exchange rate and computes what is owed.
```typescript theme={null}
// Reload to get latest state
const ytPosition = await YtPosition.loadByOwner(
LOCAL_ENV, connection, wallet.publicKey, vault
);
// Check how much can be claimed
const claimable = ytPosition.getClaimableInterest(vault.currentSyExchangeRate);
const stageIx = ytPosition.ixStageYield({
payer: wallet.publicKey,
});
const collectIx = ytPosition.ixCollectInterest({
signer: wallet.publicKey,
});
const tx = new Transaction().add(stageIx, collectIx);
await sendAndConfirmTransaction(connection, tx, [wallet]);
```
**Holdings: 1,000 PT + 1,000 YT (deposited) + \~8.1 SY (collected)**
***
## Redeem at Maturity
At [maturity](/developers/learn/post-maturity), the exchange rate freezes. PT becomes redeemable for its full SY backing, and YT stops accruing. To exit, withdraw YT from the yield position, then merge PT + YT back into the base asset.
```typescript theme={null}
// Withdraw YT from yield position
const withdrawIx = ytPosition.ixWithdrawYt({
amount: 1_000_000_000n, // 1,000 YT
});
// Merge PT + YT back to base asset in one instruction
const { ixs, setupIxs } = await vault.ixMergeToBase({
owner: wallet.publicKey,
amountPy: 1_000_000_000n, // 1,000 PT+YT
});
const tx = new Transaction().add(withdrawIx, ...setupIxs, ...ixs);
await sendAndConfirmTransaction(connection, tx, [wallet]);
```
Use `vault.ixMerge({ pyIn, depositor })` to receive SY back instead of the base asset.
***
## Summary
| Stage | Action | SDK Method | Holdings After |
| ---------- | ---------------------------------- | --------------------------------------------------- | ------------------------------- |
| Start | — | — | 1,000 USDC |
| Initialize | Create yield position (one-time) | `vault.ixInitializeYieldPosition()` | 1,000 USDC |
| Strip | Base to PT + YT (auto-deposits YT) | `vault.ixStripFromBase()` | 1,000 PT + 1,000 YT (deposited) |
| Collect | Claim accrued interest | `ytPosition.ixStageYield()` + `ixCollectInterest()` | 1,000 PT + 1,000 YT + \~8.1 SY |
| Withdraw | Prepare to merge | `ytPosition.ixWithdrawYt()` | 1,000 PT + 1,000 YT + \~8.1 SY |
| Merge | PT + YT to base asset | `vault.ixMergeToBase()` | \~1,008 USDC |
**Result:** \~0.8% return over 90 days (\~3.3% annualized), matching the underlying lending rate.
## Next Steps
Install the SDK and walk through the complete flow
Trade PT and YT on the CLMM and Orderbook
Buy and sell PT and YT on the concentrated liquidity AMM
Post limit orders at specific APY levels