A position token represents an ownership stake in a specific asset, pool, or investment strategy within decentralized finance (DeFi). When users invest in a protocol, they often receive position tokens in return, symbolizing their contribution and potential profits.These tokens can be used to track the user’s share of the underlying assets or yields generated by a protocol. They may also grant various rights, such as governance voting or participation in future profit distributions.Position tokens can vary based on the platforms that issue them, with some allowing users to trade, stake, or farm additional tokens. This functionality promotes liquidity and provides opportunities for investors to maximize returns.As the DeFi space evolves, position tokens play a crucial role in enabling transparency, accessibility, and innovation. They empower users to manage their investments more effectively while participating in a rapidly growing ecosystem.