> For the complete documentation index, see [llms.txt](https://mevcapital.gitbook.io/vaults-protocol/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://mevcapital.gitbook.io/vaults-protocol/fixed-yield/architecture-and-operational-flow.md).

# Architecture & Operational Flow

The Fixed Yield Vault structure is based on a two-pronged architecture: fixed yield harvesting via PTs and active liquidity provisioning between PT/YT pairs.

**1. Principal Token (PT) Accumulation** MEV Capital acquires PTs at a market discount. These tokens represent the right to claim a fixed quantity of the underlying asset (e.g., stETH, USDC) at maturity. Yield is determined at the time of purchase, based on the PT’s discount to face value. The vault holds PTs to term, realizing a predictable APY.

**2. Liquidity Provisioning** In addition to PT holding strategies, MEV Capital deploys capital into Pendle’s AMMs to provide liquidity between Principal Tokens (PT) and Yield Tokens (YT). This allows the vault to:

* Capture swap fees
* Earn PENDLE incentives
* Adjust exposure between fixed and variable yield segments

**3. Execution and Monitoring** Vault operations are executed on-chain and monitored continuously. Position duration, realized APY, and market-wide rate shifts are tracked to inform reallocation and risk management. In certain market conditions, PTs may be exited early if favorable secondary pricing emerges.

This model delivers reliable yield capture while maintaining transparency, flexibility, and full on-chain composability.


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