Yachatz is the breaking of the matzah. It is the fourth step of the Seder. The word yachatz means dividing. There are three matzot (the plural of matzah in Hebrew) on the table to symbolize Abraham, Isaac and Jacob. The three pieces of matzah are uncovered and the middle one is broken. We do this to symbolize the binding of Isaac, which is when God told Abraham to sacrifice Isaac to test him and see if he would do it. Don't worry, this didn't actually happen! When Abraham was about to sacrifice him, God told Abraham to stop and Isaac was saved.
The bigger piece is then hidden somewhere in the room. You will be looking for it later in the Seder. This piece is called the afikomen, a word that comes from the Greek word for "dessert." It is not called that because it is sweet, but because it is the last item of food eaten at the Seder. The practice of hiding the afikomen was introduced during the Middle Ages by Jewish families to make the Seder more entertaining and exciting for children. The smaller piece is kept in the matzah bag with the other two matzot.
Afikomen is eaten during the Tzafun (which comes from the word hidden) step, because it has been hidden away, from the beginning of the meal until the end of the meal.
(Psalms 31:20): How great is the goodness that you have hidden for those who fear you. We hide it in cushions to symbolically guard it, in fulfillment of the verse: And you shall guard the matzot (Exodus 17).
For what other reasons could there be three matzot?
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