Sierra Launches First Dynamically Rebalanced Liquid Yield Token On Avalanche Powered By OpenTrade

In Brief

Sierra Protocol has launched SIERRA, a dynamically rebalanced Liquid Yield Token on Avalanche that allows access to diversified yield from RWA and DeFi protocols.

Sierra Protocol has introduced SIERRA, a Liquid Yield Token (LYT) launched on the Avalanche network, marking a first in its category. Users can obtain SIERRA tokens in a fully permissionless manner by swapping USDC directly through any compatible wallet on the Sierra web application or via LFJ (formerly Trader Joe), the largest decentralized exchange on Avalanche. Yield begins accruing immediately upon purchase, and unlike many other LYTs, there are no hidden fees, lockup periods, minimum holdings, or staking requirements needed to earn yield.

LYTs differ from yield-bearing stablecoins in that they are not directly pegged to USD or other fiat currencies. Instead, LYTs are supported by stablecoin reserves that generate yield, which is then distributed to token holders. SIERRA introduces innovation in the LYT space by offering a diversified portfolio of yield-generating reserves, composed of both investment-grade real-world assets (RWAs) and blue-chip decentralised finance (DeFi) protocols.

The reserve portfolio backing SIERRA is dynamically rebalanced according to Sierra’s Risk Framework in response to shifting market conditions. Users can access the SIERRA Transparency Dashboard to view real-time metrics, with detailed data available through the website, CSV download, or API, supporting informed decision-making. Overall, SIERRA provides DeFi users with a novel, self-custodial method to earn risk-adjusted passive returns while maintaining broad accessibility.

New Partnership To Streamline Reserve Management And Enhance Security Across RWA And DeFi Yield Sources

Sierra manages its flexible reserves strategy through a partnership with OpenTrade, leveraging investment-grade RWAs and top-tier DeFi protocols. OpenTrade’s institutional-grade ‘yield-as-a-service’ infrastructure enables seamless allocation of reserves across traditional yield sources, such as U.S. Treasury money market funds and commercial paper, alongside DeFi platforms including AAVE, Morpho, Euler, Wildcat, and Pendle.

The OpenTrade platform simplifies operational complexity by handling workflows for all of Sierra’s yield sources through a single protocol. Institutional-grade procedures further enhance security, with all RWA collateral held in secured accounts managed by an FCA-regulated asset manager, and all DeFi vaults utilizing Fireblocks’ whitelisting and policy-enforcing features to ensure secure cryptoasset custody.

“We’re very excited about the launch of SIERRA after many months of planning and building. We believe Sierra’s flexible reserve management strategy, combined with its dynamic rebalancing capabilities, makes SIERRA a unique offering that many DeFi users will prefer holding,” said Mitchell Nicholson, Core Contributor of the Sierra Protocol, in a written statement. “We look forward to announcing many partnerships over the coming weeks that will provide SIERRA with enhanced utility across both DeFi and CeFi,” he added.

“We’re proud that Sierra has chosen OpenTrade as the technical foundation to build such an innovative protocol as part of the fast-growing DeFi ecosystem. The simplicity, transparency, and composability of Sierra represent a fresh approach to liquid yield tokens,” said Dave Sutter, CEO of OpenTrade, in a written statement. “Seeing the unique way Sierra utilizes OpenTrade’s institutional-grade infrastructure makes supporting its future growth so exciting. We look forward to continuing to support Sierra and its ecosystem for a long time to come,” he added.

“Sierra’s launch on Avalanche shows how DeFi and real-world assets can work together,” said Eric Kang, Head of DeFi at Ava Labs, in a written statement. “By building on OpenTrade’s infrastructure, Sierra makes earning on-chain yield simple, transparent, and accessible to anyone,” he added.