Income — Earn Fixed Yield
Generate stable yields regardless of market conditions
Income Tokens
Income features the Income Tokens issued by Exponent. They offer fixed, predictable yields for assets like SOL, USDC, PYUSD and are backed by locked positions deposited into such as Kamino or marginfi. With Income Tokens, holders can gain fixed returns and/or hedge yield downturns.
Income Tokens introduce a new asset class to Solana DeFi that can fit into any DeFi portfolio. They are fully fungible tokens and share bond-like characteristics, featuring maturities and predictable returns attached to them. They allow participants to balance yield volatility and access predictable yields that are unaffected by market conditions.
An Exponent Income Token represents a claim on an asset locked in a DeFi protocol or product. It gives up any volatile yield (interest, points, etc.) for a defined period, allowing traders on the other side to access and trade the yield of the product.
In return for forgoing this yield, Income Token holders gain the right to redeem the full locked assets at maturity, where 1 Income Token equals 1 unit of the underlying asset — enabling them to realize a fixed return, as long as the Income Token was purchased below the asset’s price.
Fixed Yield through Price Appreciation
An Income Token trades at a discount to the full value of the asset deposited in the underlying protocol, as the future yield is sold off until maturity and the asset remains locked. This discount equals to the market’s pricing of the remaining future yield. As the Income Token nears maturity, this discount typically narrows, reflecting the decreasing amount of future yield.
At maturity, Income Tokens can be redeemed for the total value of the locked assets, realizing the fixed yield, as holders claim more units of the asset than they initially spent to purchase Income Tokens.
Similar to how people balance their crypto holdings between volatile assets and stablecoins, fixed income tokens are a great way to balance volatile yield positions with stable yield positions for users looking for protection against yield downturns or wanting less active management of their positions.
Start Earning Fixed Yield
Head to exponent.finance/income
Click on the Income Token you wish to invest into
To decide which token to choose, look at the underlying asset, maturity and underlying protocol to evaluate which product corresponds the best to your needs.
Once the card is opened, input the purchasing amount
The app will show you the projected fixed APY, taking into account your order and price impact associated with it.
Review your purchase
This is a buy order; make sure to select the slippage you are fine with and review the price impact. You can always split your order into smaller transactions if the price impact is important.
Click on Invest
Your funds will be swapped for Income Tokens.
Wait until maturity to realize the fixed yield
You can now see your position under the Manage Tab and wait until maturity to redeem the underlying asset and realize your fixed return.
Once purchased, your Income Token can always be sold on the open market through the Withdraw tab. Double-check the price, as before maturity the price of Income Tokens is volatile. At maturity, there is no price impact, and the price of an Income Token aligns 1:1 with the underlying asset.