> For the complete documentation index, see [llms.txt](https://praxis-4.gitbook.io/praxis/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://praxis-4.gitbook.io/praxis/help-center/faq.md).

# FAQ

## Getting Started

<details>

<summary>What is Praxis?</summary>

Praxis is a yield-powered prediction market protocol on Base. Deposit USDC once, receive two tokens: a **Principal Token (PT)** that represents your original deposit, and a **Yield Token (YT)** that represents the yield that deposit generates. All prediction and game activity runs on YT only. Your principal is never on the line.

</details>

<details>

<summary>What do I need to get started?</summary>

You need two things:

* A wallet that supports Base (MetaMask, Coinbase Wallet, or any EVM-compatible wallet)
* USDC on the Base network

If your USDC is on another chain, you'll need to bridge it to Base before depositing. Once you have USDC on Base, connect your wallet, deposit into a vault, and you're ready to go.

</details>

<details>

<summary>Which network is Praxis on?</summary>

Praxis is deployed on **Base** — an Ethereum Layer 2 built by Coinbase. Base offers low transaction fees and fast finality compared to the Ethereum mainnet.

</details>

<details>

<summary>Is there a minimum deposit?</summary>

There is no protocol-enforced minimum deposit. Very small deposits may not generate meaningful YT relative to gas costs. Check the vault screen for any pool-specific thresholds.

</details>

***

## Deposits & Vaults

<details>

<summary>What is a vault?</summary>

A vault is where your Praxis position begins. When you deposit USDC, the vault deploys those funds into a yield-generating source (currently [Morpho](https://morpho.org)) and mints PT and YT to your wallet at a 1:1:1 ratio. Each vault runs for a fixed duration — the maturity date is shown on the vault detail screen.

</details>

<details>

<summary>What does "1:1:1" mean?</summary>

For every USDC you deposit, you receive 1 PT and 1 YT. Deposit 500 USDC and you'll hold 500 PT + 500 YT in your wallet. Both are standard ERC-20 tokens. You own them outright and can hold, use, or (once trading is live) sell them independently.

</details>

<details>

<summary>Does a vault auto-renew when it matures?</summary>

No. When a vault reaches maturity you must re-deposit into a new vault to start a fresh position. During the transition between vaults, the old and new vault run briefly in parallel. You can exit the expiring vault and enter the new one at your own pace.

</details>

<details>

<summary>I'm depositing mid-epoch. Will I be penalised?</summary>

A **late deposit fee** applies when you deposit after a vault's epoch has already begun. The fee equals the yield already accumulated in YT at that point, but it is transfered into the YT you receive, not deducted from your wallet. The net effect on you is zero: your YT is immediately worth the equivalent amount from the moment you deposit.

As the epoch approaches maturity the fee grows proportionally. If you see a large fee, consider waiting for the next vault to open instead.

</details>

<details>

<summary>Where does vault yield come from?</summary>

Currently from [Morpho](https://morpho.org). The vault architecture is designed to be yield-source agnostic, and additional strategies may be added over time as better-yielding options are evaluated.

</details>

***

## PT & YT

<details>

<summary>What is a Principal Token (PT)?</summary>

PT is your claim on the original USDC you deposit. One PT is always redeemable for one USDC at maturity, regardless of what happened in any prediction or game. PT does not grow in value over time and is never spent in markets or games.

</details>

<details>

<summary>What is a Yield Token (YT)?</summary>

YT represents your share of the yield the vault generates during an epoch. YT accumulates value throughout the epoch and reaches its maximum worth at maturity (unlike other yield protocols where YT decays to zero as the epoch ends). YT is your bankroll for all prediction market and game activity on Praxis.

</details>

<details>

<summary>What happens to my YT if I lose a prediction or game?</summary>

Your YT balance is reduced by the amount you staked. Your PT (and the USDC it represents) is never affected.

</details>

<details>

<summary>Can I trade PT or YT on the open market?</summary>

A secondary market for PT and YT is on the roadmap. It will enable strategies like buying PT at a discount for a fixed yield return, or buying YT for leveraged yield exposure without making a direct deposit. It is not live yet — follow [X](https://x.com/praxis_base) for updates.

</details>

***

## Predictions & Games

<details>

<summary>What markets are available?</summary>

Praxis prediction markets cover:

* **Sports & esports** — match outcomes and event props
* **Financial markets** — token prices, on-chain metrics, vault yield performance
* **Base-native markets** — Aerodrome, Bankrbot, and Virtuals token prices; TGE events; X subscriber counts

All prediction activity uses YT only. New markets are added regularly — check the app for what's currently open.

</details>

<details>

<summary>How does a prediction market work?</summary>

Every market has two sides: **YES** and **NO**. Prices fluctuate between $0 and $1 reflecting the market's collective probability estimate. At settlement the winning side pays $1 per token and the losing side pays $0.

You don't have to hold until settlement. If you buy YES at $0.30 and it climbs to $0.65, you can sell and lock in that profit before the outcome is known.

</details>

<details>

<summary>Is there always someone to trade with?</summary>

Yes. Praxis uses an **AMM (Automated Market Maker).** You trade against a shared liquidity pool, not an individual counterparty. The pool quotes a price 24/7 and adjusts automatically after every trade.

</details>

<details>

<summary>What are Games?</summary>

Games are a lighter-touch way to put your YT to work. The first game type is **Random Yield Distribution (RYD)** — a yield lottery inspired by PoolTogether. Deposit YT into a pool; at the end of the round, one or more winners are selected by Chainlink VRF and receive the entire pool. Your principal is never at risk.

**Skill-based games** — bot-vs-bot strategy contests and rotating mini-games (are on the roadmap for later in 2026).

</details>

<details>

<summary>If I lose a game, do I lose my deposit?</summary>

No. Games only ever risk YT — the yield your principal generated. Your underlying USDC remains in the vault, continues earning, and is always redeemable via PT. Losing a round means this round's yield went to someone else. Your starting position is intact.

</details>

<details>

<summary>How is winner selection in games provably fair?</summary>

Winner selection uses **Chainlink VRF** — a verifiable random function that generates a cryptographically provable on-chain result that no one, including the Praxis protocol, can predict or manipulate. Results are verifiable on-chain by anyone. Odds are proportional to how much YT you deposited relative to the total pool.

</details>

***

## Withdrawals & Exit Paths

<details>

<summary>How do I get my USDC back?</summary>

**At maturity:** Redeem PT for USDC (1 PT = 1 USDC) and redeem YT for your share of the total vault yield. These are two independent transactions, you can redeem one without the other, and there is no deadline to redeem after maturity.

**Before maturity (early exit):** Burn equal amounts of PT and YT to withdraw USDC and your share of the up-to-date yield. You can exit partially so that remaining tokens stay in place until you choose to redeem them.

</details>

<details>

<summary>I've spent most of my YT. Can I still exit early?</summary>

Only up to the amount of YT you still hold. Early exit requires matching amounts of PT and YT. If you hold 500 PT but only 100 YT remaining, you can early-exit 100 USDC right now. The remaining 400 PT must wait until maturity.

If your YT balance reaches zero, your options are: wait for maturity to redeem PT at full value, or (once trading is live) buy YT on the secondary market to reassemble the PT + YT pair needed for early exit.

</details>

<details>

<summary>What if I redeem my YT before maturity?</summary>

You receive the yield accumulated up to that point, but forfeit any yield the vault would have continued generating through the rest of the epoch. Redeeming YT early means leaving future yield on the table. Your PT is unaffected and can still be redeemed at maturity for the full principal.

</details>

<details>

<summary>Is there a deadline to claim after a vault matures?</summary>

No. There is no expiry on redemption. Your PT and YT remain valid and redeemable at any point after maturity.

</details>

***

## Safety & Fees

<details>

<summary>Can I actually lose my principal?</summary>

No. Principal is structurally protected by design. Your PT always redeems for the exact USDC you deposited, regardless of prediction outcomes or game results. The protocol never touches your principal — only the yield (YT) is ever put at risk.

</details>

<details>

<summary>What fees does Praxis charge?</summary>

Praxis charges a **winnings fee** — a percentage of your winnings on settled positions, deducted automatically at settlement. There are no additional steps required. There are no vault management fees or performance fees at launch.

</details>

<details>

<summary>Are the smart contracts audited?</summary>

External audits are required before liquidity is scaled. Audit status will be shared publicly as it progresses. Follow [X](https://x.com/praxis_base) for updates.

</details>