Receipt Token

As ERC-20 tokens, receipt tokens are programmable and composable, meaning they can be integrated into other DeFi protocols. This allows them to be used as collateral for lending, traded on DEXs, or included in yield-bearing strategies, creating a layered financial system.

• Example: A stETH (Lido Staked ETH) receipt token can be deposited into Aave as collateral to borrow other assets.

The token itself is cryptographic proof of ownership of a specific underlying asset or position. Holding the receipt token is the sole requirement to redeem the underlying asset, with the redemption logic enforced by the issuing smart contract.

• Core Function: The contract's redeem() or withdraw() function burns the receipt token and transfers the underlying asset to the holder.

Many receipt tokens, particularly those for staking or lending, feature auto-compounding yield. Rewards are accrued directly into the token, increasing the holder's claim on the underlying pool. This can be implemented via:

• Rebasing: The holder's token balance increases periodically (e.g., stETH).
• Vault Shares: The value of each share token increases as the vault earns yield (e.g., Yearn vault tokens).

Receipt tokens solve the liquidity problem of locked capital. By tokenizing a non-liquid position, they allow users to trade or leverage their locked assets without exiting the original position.

• Primary Use Case: Converting illiquid staked assets (e.g., staked ETH) into a liquid asset that can be sold on secondary markets.

By conforming to standards like ERC-20, receipt tokens create a universal interface for value representation across the Ethereum ecosystem. This standardization is foundational for interoperability, allowing wallets, explorers, and protocols to uniformly display, transfer, and interact with these assets.

The value and redeemability of a receipt token are entirely dependent on the security and correctness of its issuing smart contract. Key risks include:

• Smart Contract Risk: Bugs or exploits in the issuer's contract.
• Custodial Risk: For centralized issuers, the underlying assets may not be fully backed.
• Protocol Risk: Failure of the underlying protocol (e.g., a lending pool).

A receipt token is a fungible ERC-20 token minted to a user upon depositing an asset into a protocol. It serves as a verifiable claim for the return of the underlying asset, plus any accrued rewards. This mechanism is foundational for liquid staking (e.g., stETH for staked ETH) and yield-bearing vaults, unlocking the value of otherwise locked capital.

By conforming to the ERC-20 standard, receipt tokens become composable money legos. They can be freely traded, used as collateral for loans, or supplied to other DeFi protocols like Aave or Curve. This standardization is what transforms a simple deposit receipt into a powerful, liquid financial instrument within the broader ecosystem.

Receipt tokens handle yield accrual in two primary ways:

• Rebasing: The token balance in the user's wallet automatically increases (e.g., stETH).
• Value Accrual: The exchange rate between the receipt token and the underlying asset appreciates over time (e.g., aUSDC, cTokens). Both methods ensure the holder's claim reflects earned interest without manual claiming.

Holding a receipt token introduces specific risks:

• Smart Contract Risk: The protocol issuing the token must be secure.
• Depeg Risk: The token's market price can deviate from its intrinsic claim value, especially during market stress (e.g., stETH trading below ETH).
• Custodial Risk: The user trusts the protocol to manage and return the underlying assets.

• Liquid Staking: Lido's stETH (Ethereum), Marinade's mSOL (Solana).
• Lending Protocols: Aave's aTokens, Compound's cTokens.
• Yield Aggregators: Yearn Finance's yVault tokens.
• Liquid Restaking: EigenLayer's LSTs (Liquid Staking Tokens) used to mint LRTs (Liquid Restaking Tokens).

• Liquid Staking Derivative (LSD): A subset of receipt tokens specifically for staked assets.
• Wrapped Token (e.g., wBTC): Represents a cross-chain asset, not yield-bearing.
• Synthetic Asset: Tracks an asset's price but is not a direct claim on custody.
• Voucher/NFT: A non-fungible receipt, often used for specific, non-standardized claims.

A Collateralized Debt Position is a core mechanism in lending protocols where users lock collateral (like receipt tokens) to mint a stablecoin or borrow other assets. The receipt token's yield can help offset borrowing costs or even create positive yield loops. This is a primary use case for LSTs in protocols like MakerDAO and Aave.

A Yield Bearing Asset is any token that accrues value over time through a native mechanism, such as staking rewards or lending interest. Receipt tokens are a prime example, as they programmatically compound the underlying yield. This makes them distinct from static assets and a key building block for DeFi yield aggregation.

This describes two main mechanisms for distributing yield via receipt tokens:

• Rebasing: The token balance in your wallet increases automatically (e.g., stETH).
• Reward-Bearing: The token's exchange rate appreciates against the underlying asset (e.g., rETH, cbETH). This distinction has important implications for tax reporting and smart contract integration.

A Wrapped Token is a standardized ERC-20 representation of a non-ERC-20 asset (like Bitcoin or staked ETH). While similar, a key difference is that a basic wrapped token (e.g., WBTC) is custodial and non-yielding, whereas a receipt token like stETH is non-custodial and yield-bearing. All LSTs are wrapped tokens, but not all wrapped tokens are receipt tokens.

An Oracle is a critical piece of infrastructure for receipt tokens, especially in lending protocols. It provides external, verifiable data on the receipt token's exchange rate or value relative to its underlying asset (e.g., the stETH:ETH ratio). Reliable oracles are essential for determining accurate collateral values and preventing protocol insolvency.