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.

Read the article below to learn more about the benefits of holding SIERRA and utility across CeFi and DeFi.

Benefits of Holding SIERRA

SIERRA aims to improve upon many of the features of traditional money that we have all grown to dislike. Some of the core benefits of holding SIERRA include:

• Universal Accessibility - Anyone, anywhere around the world is able to have permissionless access to buying and holding SIERRA, provided they are not from a restricted jurisdiction. The SIERRA token smart contract does have a “blacklist” function but this can only be called on OFAC-sanctioned wallet addresses, similar to USDT and USDC

• Self-Custodial - Any user can become their own bank by holding SIERRA in a self-hosted wallet. For users who prefer relying on specialized custodians, SIERRA functions like a normal ERC-20 token and will have institutional-grade custody support on both Avalanche and Ethereum networks

• Transparent - There is a complete Transparency Dashboard on Sierra’s website, which outlines the breakdown of SIERRA’s reserves across yield sources in real-time. Additionally, we have significant details on the risk framework in Sierra’s docs and aim to publish weekly attestations of Sierra’s reserves by a third party shortly after launch

• Intrinsic Yield - The reserves backing SIERRA are deployed across a variety of RWA and DeFi yield sources, which passively earn yield that accrues back to SIERRA holders

• Tax Efficient - Instead of the rebasing model that some LYTs use, SIERRA appreciates in value against USD over time as yield passively accrues. This helps end users choose when they trigger capital gains by disposing of SIERRA rather than continuously receiving income over time

• Simple User Experience - SIERRA has a single token model, where all holders equally accrue yield and there is no staking, claiming or locking required to earn yield

• Earning Points - There will be a governance token that governs the Sierra Protocol and core features of SIERRA. More information around the governance token, points program and airdrop will be released in November

SIERRA’s Utility Across CeFi and DeFi

SIERRA is primarily designed for users who want to save and build wealth using an improved form of money. It will have additional utility across CeFi and DeFi through integrations with many partnering protocols, platforms and applications. Some examples of additional utility for SIERRA include:

• Posting it as trading collateral on centralized and decentralized derivatives trading platforms, where the intrinsic yield helps to offset trading costs and enhance the returns of trading strategies

• Depositing it in DeFi liquidity pools across several DEXes on both Ethereum and Avalanche to provide deeper secondary market liquidity for SIERRA and earn additional yield through trading fees

• Supplying it as collateral on lending markets and borrow against it

• Deploying it in advanced DeFi strategies, such as looping on lending markets to capture inefficiencies where the intrinsic yield exceeds the cost to borrow against it 

• Buying it on CEXes and FinTech platforms

• Safeguarding it with platforms and service providers that specialize in custodial solutions

• Funding crypto payment cards and spending it at the point-of-sale anywhere that cards are accepted globally

• Wagering it on crypto casino and sports betting platforms where the intrinsic yield helps to enhance user winnings or betting longevity

• Sending cross-border remittances to friends and family members to help them save and build wealth while minimizing transaction costs

• Managing your treasury by optimizing use of idle cash assets while not giving up liquidity as spending use cases arise

To summarize, there will be many forms of utility for SIERRA that arise over the next few months as new partnerships and integrations are unveiled across both DeFi and CeFi.