Sierra Protocol launches LYT yield token on Avalanche

Sierra Protocol has introduced the liquid yield token (LYT) named SIERRA on the Avalanche network, opening up a new way for DeFi users to earn passive yields with adjusted risk.

The SIERRA token stands out as the first LYT backed by a rebalanced asset portfolio, combining (RWA) standard institutional real assets and blue-chip DeFi protocols. Unlike traditional yield-generating stablecoins, SIERRA is not pegged to fiat but is supported by stablecoin reserves — the accumulated yield is distributed directly to holders.

This reserve portfolio is “dynamically rebalanced” based on Sierra's proprietary risk management framework, allowing asset allocation to change automatically according to market conditions.

Users can purchase SIERRA by swapping USDC on the Sierra web application or on the LFJ exchange. The yield starts accumulating immediately, with no hidden fees, no locks, no minimum requirements, or staking.

The protocol provides a transparent real-time dashboard along with detailed data via website, CSV, or API. Sierra operates on the infrastructure of Opentrade — an organizational standard “yield-as-a-service” platform — helping to optimize the process for both RWA yield sources and DeFi.

The launch of SIERRA is seen as an important step for the RWA ecosystem of Avalanche. Ava Labs considers this a testament to the ability to combine traditional finance and decentralized infrastructure to provide simpler and more transparent on-chain yields.

Sierra Protocol aims to provide self-custody, diversified, flexible, and secure solutions for risk-adjusted yield in the DeFi space.