Sense Finance
Credit · Fixed Income · SENSE
Sense Finance is a yield-stripping protocol that decomposes yield-bearing assets into zero-coupon Principal Tokens and Yield Tokens for fixed-rate and yield-trading use cases. Verify on-chain activity before relying on it.
Yield stripping into zero-coupon and yield tokens.
Protocol TVL
—
Latest data · 15 min delay
Research
Components, facts, FAQ, timeline, and tokenomics in one place
Main components (4)
Sense Divider (yield stripping)
Core Sense v1 contract that takes any yield-bearing asset (a 'Target', e.g. stETH or cUSDC) via an adapter and splits it into two fixed-term ERC-20 tokens for a given maturity: a Principal Token (PT, 'sP' prefix) that redeems 1-for-1 for the underlying at maturity, and a Yield Token (YT, 'sY' prefix) that claims the yield accrued until maturity. Combining PT+YT reconstitutes the Target.
Sense Space AMM
A custom fixed-rate automated market maker (a YieldSpace implementation) where PTs and YTs trade. Its key innovation is that LPs deposit the yield-bearing Target itself as the quote asset rather than the underlying; accrued Target yield is excluded from the YieldSpace invariant and reserved for LPs, so LP capital keeps earning even when no trading occurs. Space is deployed on Balancer V2 vault infrastructure and includes a TWAP oracle.
Adapters
Permissionless connector contracts that onboard a specific yield-bearing asset into Sense (e.g. Lido stETH, Compound cUSDC). Adapters define how a Target's scale/underlying is read, enabling anyone to add new fixed-income markets without core-team approval.
Roller / Auto-Roller (RLV)
A Roller Liquidity Vault that automatically rolls liquidity from an expiring PT/YT series into the next maturity, letting LPs maintain continuous fixed-income exposure without manually migrating at each rollover. Audited separately by Sherlock and Fixed Point Solutions in late 2022.
Differentiator
Early yield-tokenization design (Sense Space AMM); confirm current activity levels before treating its markets as live.
Organizational structure
Units & roles
- Founding/development team
Sense Finance (Sense Core team)
The core team that built and operated the Sense Protocol, co-founded and led by Kenton Prescott (Co-Founder & CEO). After sunsetting Sense in October 2023, the team stated it would cease contributions to the protocol and had begun building a new project in stealth.
Investment rounds
| Date | Round | Amount | Investors | Link |
|---|---|---|---|---|
| 2021-08-03 | Seed | $5.2M | Dragonfly CapitalRobot VenturesBain Capital | Source |
Similarity to traditional finance products
How Sense Finance maps onto established TradFi structures, and where it diverges.
| TradFi product | Similarity to Sense Finance | Key differences |
|---|---|---|
| Zero-coupon bond / STRIPS (Treasury interest-rate strips) | A Sense Principal Token is economically a zero-coupon bond on the underlying asset: it is bought at a discount and pays out a fixed amount (the principal) at a set maturity date, locking in a fixed yield. This mirrors how TradFi STRIPS separate a coupon bond's principal from its interest payments and trade the principal as a discount instrument. | PTs are permissionless, on-chain, and reference DeFi yield-bearing assets (stETH, cUSDC) rather than sovereign/corporate credit; they carry smart-contract and Target/depeg risk rather than issuer credit risk, and have no coupon at all (the yield stream is separated into the Yield Token). |
| Interest-rate strip / coupon strip | A Sense Yield Token is analogous to the coupon strip of a bond: it isolates and trades only the future interest (yield) payments of the underlying over a fixed term, letting holders take a directional view on rates. | YTs settle continuously against the actual on-chain yield of the Target and become worthless at maturity, versus fixed, contractually scheduled coupons on a TradFi bond; pricing is set by an AMM, not a dealer market. |