We are proud to provide the latest monthly report for the Sierra Protocol!  We publish these regularly to ensure all community members have ready access to the most pertinent information across the Sierra ecosystem. 

Please contact us at hello@sierralabs.xyz if you would like to explore partnership opportunities, have any questions, or generally have feedback on how we can improve Sierra or this report going forward.

Highlights

• Formally revealed the Sierra Protocol as a permissionless yield issuance protocol 

• Total SIERRA outstanding: $40.2M on Avalanche and $31.8M bridged to Ethereum 

• Month-on-month TVL growth: 14%

• SIERRA PT yields: 10.03%, total liquidity: $28.1M, +/- 10% depth: $12.5M 

• Reserve additions: No major changes; expect new additions in July

• SIERRA’s yield averaged 3.6% for the month - expect this to continue rising as we add new allocations

• The Summit PEAKS program is in full swing and will run through TGE

Reintroducing the Sierra Protocol

We are very excited to finally reveal what we have been finalizing in the background for the past several months: the Sierra Protocol as an institutional RWA yield primitive. Though you may know us as the issuer of the SIERRA LYT, the Sierra Protocol itself is far, far more expansive and capable in what it can do.

Now, partners of all types across the industry - fintechs, asset managers, RWA originators, exchanges, curators, chains, and DeFi protocols - can leverage Sierra’s unique architecture to launch permissionless vaults and LYTs with the exact risk, liquidity and yield profile that they desire, backed by any combination of RWAs and onchain yield sources. See our latest blog post for a deeper dive.

• Deploying a Permissionless Vault - Partners bring the product vision and Sierra provides the smart contracts, legal structure, custody, and access to unique RWAs

• Accessing Premium Curated Vaults - Depositors allocate directly into vaults managed by a dedicated team of regulated investment professionals overseeing over $6B for institutional investors

• Issuing a Liquid Yield Token - Partners extend the permissionless vault offering into a full LYT, making it permissionless and composable across DeFi and CeFi

• Powering an Earn Product - Fintech providers, from self-custodial wallets to neobanks, use Sierra vaults and LYTs as the engine behind their own Earn offerings

What sets Sierra apart from any other protocol in the industry is our unique ability to tap into any yield source, onchain or off. Whereas most - including the market leaders - are restricted to only onchain yield sources, Sierra is able to originate exposure to any offchain asset as well, meaning the range of possible vault portfolios through Sierra is entirely unmatched.

The current menu of yield sources spans every type of fixed income or credit RWA, including money market funds, AAA-rated CLOs, commercial paper, active bond funds, asset-backed financing, trade receivables, private credit, and hedge funds. We also have access to any available DeFi protocol and curated vaults with OpenTrade's Prime+ Flexible, Managed DeFi, and Stablecoin Staking products.

We are already working with several partners to create bespoke custom assets for permissionless use and are excited to announce those as they come live over the coming weeks and months.

If you are looking for the highest quality assets or vault exposure in the industry, please reach out to explore how we can work together here.

TVL and Yield

Following on last month’s 25% increase in TVL, SIERRA had another impressive month, adding another 14% into the product. Total SIERRA minted crossed $40M for the first time, largely driven by a combination of continued LatAm neobank flows and new hedge funds getting exposure through SIERRA’s Pendle markets. 

We will start to sound like broken records here, but every conversation we have further cements our beliefs that Sierra will become the industry standard for how yield-bearing (and other…) assets will be brought onchain. As we stated last time, the transparency, institutional-grade architecture, and security-first approach we implement, coupled with the low-risk and investment grade asset backing we select, differentiates us from the other offerings in DeFi. SIERRA’s value proposition is increasingly clear to allocators, treasury managers and CFOs, and we continue to see flows moved away from more established protocols and into SIERRA.

SIERRA targets a competitive volatility-managed and risk-adjusted yield while maintaining maximum liquidity through primary and secondary market venues. As of June 30, SIERRA yielded 3.6% over the month on an annualized basis and has yielded 4.6% over the past 7 days. 

SIERRA is designed to reflect accrued yield in its price, rather than rebasing or through interest distributions, thus continuously increasing its exchange rate against USDC over time. This exchange rate is updated continuously to ensure the most accurate accounting possible as the underlying vaults appreciate in value. The SIERRA/USDC exchange rate can be seen below and can be viewed at any time, along with SIERRA’s APY as well as that of each underlying reserve vault, on SIERRA’s transparency dashboard: https://app.sierra.money/transparency.

Reserve Allocations

We continue to build out our investment-grade commercial paper reserve backing, all structured and managed by multi-billion dollar FCA-regulated asset manager Five Sigma Finance. Our portfolio is diversified across investment grade issuers and maturities - all sub-30 days currently - and can be viewed at any time through the reserve reports on our transparency dashboard here. The current portfolio is as follows, with new paper from issuers such as Eli Lilly (the trillion-dollar pharmaceutical company), Visa, CBRE and Barclays

Sierra’s reserve distribution overtime is shown below:

Integrations and Partnerships

We announced our newest Pendle market - a short 35 day market that runs through August 5. With this launch, SIERRA has one of the strongest markets on the platform and we have seen renewed interest in institutional allocations to our PTs.

We have also been working closely with several curators to begin accepting SIERRA PTs in their Morpho vaults as collateral. Since launching, we have received tremendous inbound demand to loop our PTs given the quality structuring of the underlying. We are excited to finally bring this to market and look forward to enabling leveraged exposure to Sierra for partners seeking even higher yields on the same, quality base. Expect vault allocations to open up in the first half of July with some capacity caps, and then expanded size over the coming weeks.

Summit Program

As a reminder, we kicked off our points campaign, referred to as our Summit PEAKS Program, in November. Participants are able to earn PEAKS for engaging in a range of activities across DeFi and CeFi with SIERRA. We will continuously roll out new ways to participate as the Program continues, so be sure to check in frequently. 

Participants can view current opportunities and track their progress on our dashboard here: https://app.sierra.money/peaks. Epochs will run from Thursday 0:00:00 UTC through Wednesday 23:59:59 UTC, and updates to the dashboard will be reflected following the completion of each epoch.

As always, we are excited to have you join us as we build this novel protocol into the industry-leading liquid yield token issuer, with SIERRA as our flagship LYT. Stay tuned as we continue to roll out updates over the coming weeks and months, and please reach out if you would like to work together in any way. 

Thank you for your time and attention, and welcome to the Sierra Community! 

Sincerely,

Mitch and Kevin