> ## 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.

# Overview

***

This section covers the core protocol mechanisms that power Exponent's interest-rate swap infrastructure. Understanding these systems is useful for advanced users, integrators, and anyone evaluating how the protocol works at a technical level.

## Protocol Architecture

Exponent is built on top of three protocol layers:

<Card icon="distribute-spacing-vertical" horizontal title="Yield Stripping (Exponent Core) – the issuance layer">
  Strip yield assets into Principal Tokens (PT) and Yield Tokens (YT) for a defined maturity. Handles minting, redemption, merging, and yield distribution. All other layers build on top of this.
</Card>

<Card icon="wave-triangle" horizontal title="Trading Infrastructure (Rate CLMM and Order Book) – the exchange layer">
  Two venues serve different market profiles: the Rate CLMM provides concentrated liquidity for long-tail and volatile markets, while the Rate Order Book enables precise quoting and large trades for high-volume markets. Both are purpose-built for interest rate swaps.
</Card>

<Card icon="layer-group" horizontal title="Strategy Vaults – the managed product layer">
  Professional managers deploy interest-rate swap strategies across the issuance and exchange layers, governed by onchain policies. Strategy constraints are programmatically enforced, not discretionary.
</Card>

## Flow Example

<Steps>
  <Step title="Protocol/Asset Issuer">
    A yield asset issuer (e.g. Protocol A with an LST) integrates its asset at the issuance layer, where it is stripped into PT-LST and YT-LST
  </Step>

  <Step title="Market Listing">
    This market become tradable at the exchange layer for interest-rate swaps, where liquidity providers and traders exchange them on the Rate CLMM and/or Order Book
  </Step>

  <Step title="Trading">
    Yield participants can manage their rate exposure through the PT/YT-LST yield market
  </Step>

  <Step title="Market-making">
    Liquidity providers actively market-make the market to earn fees from PT/YT-LST swaps
  </Step>

  <Step title="Strategy Vault">
    At the product layer, a Strategy Vault might offer a high-yield fixed strategy by purchasing PT-LST on the CLMM or order book, then looping it on credit platforms to increase its fixed yield, earning higher returns for its depositors.
  </Step>
</Steps>

Different users interact with different parts of the stack depending on their objective:

* **Passive participants** may prefer **Strategy Vaults**
* **Active traders and LPs** interact directly with **Yield Markets**
* **Developers and integrators** can build across any layer through Exponent’s SDKs

## Deep Dives

<CardGroup cols={2}>
  <Card horizontal href="/user-documentation/yield-stripping-swap" title="Yield Stripping & Swap">
    How yield assets are stripped into PT and YT and how interest rate swaps work.
  </Card>

  <Card horizontal href="/user-documentation/rate-clmm" title="Rate CLMM">
    Concentrated liquidity market maker designed for interest rate instruments.
  </Card>

  <Card horizontal href="/user-documentation/rate-order-book" title="Rate Order Book">
    Onchain order matching for large rate trades and professional market makers.
  </Card>

  <Card horizontal href="/user-documentation/strategy-vault-concepts" title="Strategy Vaults">
    Onchain-governed managed strategies built on Exponent's rate infrastructure.
  </Card>
</CardGroup>