> For the complete documentation index, see [llms.txt](https://whitepapercrypto.gitbook.io/ifxwhitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://whitepapercrypto.gitbook.io/ifxwhitepaper/business-model/feature/yield-tokenization.md).

# Yield Tokenization

Yield Tokenization is a process where yield-bearing tokens are divided into two distinct components: the yield and the principal. The yield component represents the future income generated from the underlying asset, while the principal component represents the original amount invested or the underlying asset's base value.

**Benefits of Yield Tokenization**

1\. Risk Mitigation: By isolating the yield, investors can earn predictable fixed yields with the principal component, removing risks associated with yield fluctuations. (e.g. earn fixed yield on stETH)

2\. Maximizing capital efficiency: Investors can free up the principal for leveraged yield exposure, eliminating the risk of liquidation or oracle errors from borrowing. (e.g. bet on stETH yield going up by purchasing more yield)


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://whitepapercrypto.gitbook.io/ifxwhitepaper/business-model/feature/yield-tokenization.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.