Stellar Community Fund

Principal

SCF #44

SCF #45

Description

Principal Protocol is a Soroban-native yield tokenization protocol for Stellar Real-World Assets (RWAs). The protocol adopts a proven yield-tokenization model that separates a yield-bearing asset into two independent instruments: Principal Tokens (PTs), which provide fixed-income exposure redeemable at maturity, and Yield Tokens (YTs), which represent the future yield generated by the underlying asset until maturity. Stellar has a growing base of tokenized RWA assets, yet it lacks dedicated infrastructure that allows users to trade, lock in, and hedge future yield. Principal Protocol fills this gap by bringing PT/YT yield tokenization to the asset class where Stellar is strongest: tokenized RWAs. By transforming yield-bearing assets into separate principal and yield claims, the protocol creates the foundation for fixed-income markets, yield trading, and next-generation RWA financial products on Stellar.