📖Introduction

The Sierra Protocol reimagines money by issuing SIERRA, a Liquid Yield Token (LYT) built to deliver the best user experience across DeFi, CeFi and TradFi. Instead of dealing with hidden fees, banking delays and price inflation, SIERRA holders experience a new form of money that is universally accessible, self-custodial, transparent and growing in value through intrinsic yield. By holding SIERRA, users passively earn industry-leading yield, compounded daily without any lock-ups, hidden fees, or requirements to stake or claim rewards.

Backed by USDC deployed into a diversified portfolio of real-world financial assets (RWAs) and blue-chip DeFi yield sources, SIERRA delivers stable risk-adjusted returns, deep liquidity, and utility through integrations across CeFi and DeFi.

What is Liquid Yield Token (LYT)?

A Liquid Yield Token (LYT) is an ERC-20 token that provides yield to tokenholders, where the yield is derived from income-generating assets backing the LYT.

Unlike traditional staking or yield farming where user funds are locked in smart contracts, LYTs maintain secondary market liquidity that enable LYT holders to buy or sell without locking or redeeming their capital from the underlying vault. Additionally, LYTs enable composability with CeFi and DeFi platforms, including CEXes, DEXes, lending markets, yield platforms, consumer apps and more.

As yield accrues, LYTs can either rebase or appreciate in price. Rebasing involves growing the user's balance of an LYT over time whereas price appreciation means a user's balance remains fixed but the USD value of their holdings increases. SIERRA is designed to appreciate consistently over time as yield passively accrues, which helps to enable seamless integrations across CeFi and DeFi platforms.

Is SIERRA a yield-bearing stablecoin?

No, SIERRA is not a stablecoin or Yield-Bearing Stablecoin (YBS) because its value is not pegged to a fiat currency. SIERRA is designed as a LYT that appreciates against USD over time as yield generated by the reserve assets passively accrues.

Is SIERRA fully collateralized?

Yes, each SIERRA token is backed 1:1 by USDC deployed into blue-chip RWA and DeFi yield sources held in custody under a bankruptcy remote structure to ensure transparency and security.