yETH Token

Definition ∞ A yETH token refers to a specific type of yield-bearing Ether derivative token, typically issued by a decentralized finance (DeFi) protocol. yETH tokens generally represent staked Ether or Ether deposited into a yield-generating strategy, providing holders with a claim on the underlying ETH and any accumulated rewards. They permit users to retain liquidity while earning returns on their Ether holdings. The value of yETH tokens is designed to increase relative to ETH over time.
Context ∞ yETH tokens are a significant component of the liquid staking and yield optimization landscape within decentralized finance. Discussions often center on the security of the underlying protocols and the transparency of yield generation strategies. A critical future development involves the standardization of these yield-bearing tokens to enhance interoperability and reduce user risk.