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. 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.

As transparency is a core pillar for Sierra, this blog post outlines all fees associated with using SIERRA to help get the most out of their interactions with the Sierra protocol.

Fees & Transaction Costs

There are several forms of fees and costs that users may encounter while buying, selling, transferring and holding SIERRA, including:

1. Gas Fees

Gas fees are required to send transactions on the Ethereum and Avalanche blockchains, where Ethereum's gas fees are denominated in ETH and typically higher than fees paid in AVAX on Avalanche. Gas fees are set by the respective blockchain protocol and are a function of the current demand to transact, so users may reduce their gas fees by waiting to send transactions when blockchain activity is relatively lower.

2. Swap Fees

In DeFi, swap fees are charged by decentralized exchanges (DEXs) and go directly to the liquidity providers (LPs) of SIERRA. DEX liquidity for SIERRA is set up on LFJ for Avalanche and Uniswap for Ethereum, with fees ranging from 1 to 10 basis points (bps) depending on the liquidity pool.

For users buying and selling SIERRA via the Swap page on Sierra’s website, there are no additional fees charged beyond standard DEX LP fees and gas fees. In the event that OKX DEX API service, which powers the Swap page on Sierra's website, starts to charge fees then we will update our documentation and notify users. In the future, an additional swap fee may be implemented on the Swap Page on Sierra's website, with all fee revenue directly accruing to the SIERRA treasury wallet.

3. Service Provider Fee

OpenTrade, as the service provider that licenses technology to the Sierra protocol and manages all reserves backing SIERRA, charges a platform fee of 25 bps per annum on the yield generated by the reserves backing SIERRA. There are no other management, withdrawal or deposit fees charged by OpenTrade on SIERRA’s reserves for the services provided to the Sierra Protocol.

4. Sierra Protocol

Currently, the Sierra Protocol does not charge any fees on the yield generated by the reserves backing SIERRA. In the future, an additional fee on the yield generated by SIERRA's reserves may be charged, where all revenue would go to the SIERRA treasury wallet.

Conclusion

SIERRA is designed to offer best-in-class user experience and risk-adjusted yields for all holders. Staying true to the ethos of transparency, this blog post outlines all of the types of fees that users may experience throughout buying, selling, transferring and holding SIERRA. There are no hidden fees and all future fee changes will be transparently communicated. 

As mentioned above, all fee revenue generated by the Sierra Protocol will go to the SIERRA treasury wallet. More information on governance of the Sierra Protocol and treasury wallet will be available in November.