Sierra Protocol has launched a liquid yield token (LYT) on the Avalanche network that introduces a new way for decentralized finance (DeFi) users to earn passive, risk-adjusted returns. The token, SIERRA, distinguishes itself as the first LYT backed by a rebalanced portfolio that blends institutional-grade real-world assets (RWAs) with blue-chip DeFi protocols.
Unlike traditional yield-bearing stablecoins, SIERRA is not pegged to a fiat currency but is backed by stablecoin reserves whose accrued yield benefits the token holders. According to a media statement, this liquid yield token takes this concept further by combining two distinct asset classes in its reserves. This diversified reserve portfolio is “dynamically rebalanced” according to Sierra’s proprietary risk framework, allowing the token’s allocation to automatically adjust in response to evolving market conditions.
Mitchell Nicholson, Core Contributor of the Sierra Protocol, expressed excitement over the launch: “We believe Sierra’s flexible reserve management strategy, combined with dynamic rebalancing capabilities, make SIERRA a unique offering that many DeFi users will prefer holding.”
As per the statement, the LYT is acquired by swapping USDC directly on the Sierra web application or on LFJ (formerly Trader Joe), the largest decentralized exchange on Avalanche. The yield begins accruing immediately upon purchase, with no hidden fees, lockups, minimums, or staking requirements.
A dedicated Transparency Dashboard provides users with real-time portfolio insights and detailed data via the website, CSV download, or API. Sierra’s robust infrastructure is powered by a strategic partnership with Opentrade, utilizing its institutional-grade ‘yield-as-a-service’ platform. Opentrade abstracts the operational complexity, managing workflows for RWA and DeFi sources through a single protocol.
Dave Sutter, CEO of Opentrade, commented that the new protocol “represents a fresh approach to liquid yield tokens” and is a testament to the power of combining traditional finance with decentralized infrastructure.
The launch is a significant win for the Avalanche ecosystem, which has seen considerable growth in Real-World Asset integrations. Eric Kang, Head of DeFi at Ava Labs, stated, “Sierra’s launch on Avalanche shows how DeFi and real-world assets can work together. By building on OpenTrade’s infrastructure, Sierra makes earning on-chain yield simple, transparent, and accessible to anyone.”
By prioritizing diversification, dynamic management, and institutional-grade security, Sierra Protocol aims to deliver a novel, self-custodial solution for risk-adjusted returns in the DeFi space.
- What is the new SIERRA token? SIERRA is a Liquid Yield Token (LYT) on the Avalanche network that offers passive, risk-adjusted returns without fees or lockups.
- What assets back the SIERRA token? It is the first LYT backed by a dynamically rebalanced portfolio of institutional-grade Real-World Assets (RWAs) and blue-chip DeFi protocols.
- How can Avalanche users acquire SIERRA? Users can get SIERRA by swapping USDC directly on the Sierra web app or on LFJ (formerly Trader Joe), the largest DEX on Avalanche.
- What infrastructure supports SIERRA? SIERRA leverages a partnership with OpenTrade, utilizing its institutional-grade ‘yield-as-a-service’ platform for reserve management and security.
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