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EPT price depends on one equation. This page walks through that equation and what drives it. If you want the full matching math behind ST/EPT pricing, read Orderbook Mechanics.

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How ST and EPT Are Priced

NAV is the value of one vToken’s vault position in the vault’s accounting unit. It remains constant for a vault without underlying APY. Yield earned by vToken is reflected either in its NAV or in the price of the input token itself. NAV does not respond to orderbook activity. ST and EPT are the underlying-token and points-side components of a vToken. ST retains exposure to any yield earned by vToken because it redeems for vToken at maturity. They trade on the orderbook priced in vTokens. EPT buyers pay for the points side of the vToken. Whatever they pay, the remainder is what ST is worth. If ST trades at 0.98 vToken, the market is valuing EPT at roughly 0.02 vToken. The more someone pays for EPT, the cheaper ST gets — and vice versa. The matching service and settlement contracts keep this relationship tight. When an ST buy and EPT buy arrive together, settlement can split vTokens into ST + EPT. When an ST sell and EPT sell arrive together, settlement can recombine ST + EPT into vTokens.

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Returns Framing

The natural question is “is 0.02 vToken too expensive?” The better question: what is the implied return? EPT earns credits that determine CreditToken issuance. Its value depends on how many CreditTokens you earn and what those CreditTokens may be worth.
EPT uses the APR-priced ST/EPT orderbook. The separate CreditToken market uses a direct quote-token-per-CreditToken price.

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Worked Example

You use 5 vTokens to buy 250 EPT at 0.02 vToken each during a 60-day series:

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Leverage and Price

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EPT Price Decay

If EPT is 0.02 vToken with 8 weeks left, you earn credits for all 8 weeks. If EPT is still 0.02 vToken with 2 weeks left, you earn credits for just 2 weeks. Same price, very different return. In practice, EPT price decays as the series progresses because fewer credits remain to be earned. As mentioned in Orderbook Mechanics, this is why orders are priced in APR and not absolute price, since APR remains stable as time passes.

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Leverage Increases with Time for Same APR

If APR remains the same and your size remains the same, EPT leverage increases as you get closer to maturity. For example, suppose you spend 100 vTokens at 10% APR:
  • with 1 year left to maturity, that maps to about 1,100 EPT
  • with 1 month left to maturity, that maps to about 12,100 EPT
So the same 100 vTokens at the same APR can map to much larger EPT size as time remaining gets shorter. That is why leverage is not a fixed property of EPT price alone. It depends on both:
  • APR
  • time remaining
And this is also why quoting the orderbook in APR is important: absolute token size changes with time, but APR stays stable.

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What Drives EPT Price

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Credits

EPT uses a smart credit-based system to calculate CreditToken distribution over time. See Credit Mathematics for how credits work and how CreditTokens are assigned across periods.