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# Element Finance pToken

Element Finance allows users to strip yield-bearing positions into Principal and Yield Tokens
The first supported collateral partner of FIAT is Element Finance. Element Finance's principal tokens represent a claim on a deposit made into a yield-bearing market at a known point in the future and can thus be viewed as Zero Coupon Bond-like assets. Users are able to earn a fixed yield on them through one of two ways:
• Minting the "PT" to sell the "YT": When creating a principal token, the user also receives a yield token that retains ownership of all subsequent yield to be earned by the associated deposit. By selling the YT, the user locks in a known income and then simply waits for the maturity of the principal token's to withdraw the initial deposit.
• Purchasing the PT at a discount: Principal Tokens can be bought at a discount to face value on specific YieldSpace AMMs spun up by Element Finance. By holding until maturity, the user is able to realize the discount as yield on the original purchase amount.
Providing liquidity for Principal Tokens: https://docs.element.fi/element/providing-liquidity

## Principal Token Vault

For each supported maturity of a Principal Token, there is a Minimal Proxy-based Vault deployed which delegate-calls into the actual implementation of the Principal Token Vault (VaultEPT) which is deployed for each Wrapped Position.

## Pricing Principal Tokens

#### Discount Rate

Currently all Element Finance Principal Token vaults use the same precomputed fixed discount rate for computing the fair price of the deposited assets.
$\text{discountRate} = (1.1^{\frac{1}{365*86400}}-1) * 10^{18} = 3022265993$

## Convenience Methods / Zaps

The following methods wrap multiple actions into a single transaction for proxy users.