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

Please contact us at info@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:

• The Sierra Protocol is now listed on DeFi Llama and Stablewatch

• Core Contributors Mitchell and Kevin joined The Gwart Show for a wide ranging conversation on everything Sierra and Liquid Yield Tokens

• Added two new yield sources to Sierra's Reserve Management Strategy: Investment Grade Commercial Paper and a bespoke Solana Staking + Basis product, built by OpenTrade and leading institutional staking provider Figment

• Removed uncollateralized lending through Wildcat as a yield source

• The first SIERRA Pendle market is now live, running through April 1, 2026

• SIERRA’s yield averaged 3.84% for the month 

TVL and Yield:

SIERRA is unique in its approach to abstraction, security, transparency and simplicity, providing users with dynamically rebalanced risk-adjusted exposure to a diversified basket of RWA and blue chip DeFi yield sources, all wrapped in a single, non-rebasing composable token. Simply put, SIERRA reimagines what money can be.

New inflows to SIERRA were somewhat subdued over the month as we continue to round out the reserve structure and focus attention on partnerships. This is paying off, particularly through cross-selling with OpenTrade, and we are expecting substantial inflows over the next few weeks. In fact, at the time of writing, we have already received $1M in new capital into SIERRA with more on the way.

SIERRA targets a competitive volatility-managed and risk-adjusted yield while maintaining maximum liquidity through primary and secondary market venues. As of February 28, SIERRA’s intrinsic yield was 3.79% APY, and returned 3.84% over the month on an annualized basis. Yields across the board continued their downward trends, led by reductions in onchain lending rates. Aave USDC on mainnet is now yielding just ~2%, for example. 

We added a test allocation of a new yield source in early February - a Solana Staking + Basis product from OpenTrade and Figment. We intentionally began this as a small trial allocation to ensure flow of funds and integration fidelity, expecting there to be minimal impact on overall yield profile. But as fortune would have it, market volatility spiked the day after we allocated, leading to dramatic moves in yield despite the small allocation and short timeframe. This strategy has backtested to comfortably over 10%+ annualized and we view it as a valuable addition to our reserves. The test was successful and we will build an allocation to it as we continue to scale TVL.  

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 every 15 minutes 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:

As we previewed in our January report, we have had several reserve changes in the pipeline for a while and we began implementing those changes over the month. First, we removed the Wildcat-Wintermute vault. Though there were no issues with this vault and yields remained competitive, we received feedback that depositors would be more comfortable without the unsecured allocation. We then added two new approved vaults for inclusion: investment grade commercial paper (underwritten and managed by an FCA-regulated asset manager) and a bespoke SOL-staking basis vault built with Figment. As we build allocations for each of these, we expect meaningful lift to SIERRA’s yield while better diversifying the portfolio.

To complement those new vaults, we expect to add additional differentiated yield sources over the coming weeks:

• AAA-rated investment grade CLOs

• Trade Finance (8+ Sharpe ratio)

• Bluechip Pendle PTs: holding the PT itself, as well as overcollateralized lending against specific PT positions

As always, we will introduce these new yield sources gradually and with a security-first approach. The resulting portfolio will be far more diversified across a wider range of yield types, helping to deliver a yield profile that is more robust across changing market conditions, with improved stability from higher allocations to RWA yield sources. Importantly, portfolio liquidity will always remain very high.

Sierra’s reserve distribution overtime is shown below:

As a reminder, a full real-time breakdown of reserves are available at all times at https://app.sierra.money/transparency.

Integrations and Partnerships:

Our goal is to maximize the utility of SIERRA across DeFi, CeFi and Tradfi through the broadest suite of integrations in the industry. But in order to do so, the foundations have to be in place that first make SIERRA the highest-quality, institutional grade yield bearing asset in the industry. As such, we are proud to announce our integrations and partnerships with the best infrastructure providers in the space: 

Our biggest new offering to clients around the world is a Sierra Managed LP vault, provided by OpenTrade. Fintechs, neobanks and exchanges can now allocate to managed SIERRA DeFi strategies (Uniswap and LFJ LP, Pendle LPs and SIERRA PTs) through the exact same form factor they use to access OpenTrade’s industry-best stablecoin yield opportunities. This means that millions of users around the world can now earn yield from SIERRA DeFi opportunities, with all complexity completely abstracted away. Though not guaranteed, we expect this vault to yield almost double what SIERRA itself yields, and early interest in this product has been immense.  Expect those inflows to start hitting the tape over the next week or two. 

This integration highlights the power of the Sierra<>OpenTrade relationship. Enterprises around the world can seamlessly earn yield on their stablecoins from the widest range of sources in the industry (DeFi, RWAs, basis), and now can do so in the form factor that suits them best: direct vault integrations or through ERC-20 tokens. 

On March 1, we opened up our first Pendle market for SIERRA. Pendle is the industry’s leading yield trading protocol with over $2B on its platform currently while facilitating more than $50B in swap transactions in its history. Pendle allows users to split a yield-bearing token such as SIERRA into two component parts: a principal token (PT) and a yield token (YT). This is a very exciting rollout as this now unlocks novel new adoption paths for SIERRA holders. By purchasing a PT, users can lock in fixed-rate yields that are commonly well in excess of the underlying SIERRA intrinsic yield (e.g. 8%+). Alternatively, for users that wish to gain more explicit exposure to SIERRA yield and the Peaks allocation come TGE, users can purchase YTs. Finally, users can provide liquidity into the SIERRA market and earn from a combination of SIERRA intrinsic LP, protocol rewards and trading fees.

This first market is relatively short and runs through the end of March. Following its conclusion we will launch a new 3-month market at the beginning of April, and another 3-month market subsequent to that beginning in July. At the time of writing, SIERRA PTs are yielding 11.2% fixed rate returns.

One interesting tidbit we wanted to share: we are seeing growing interest from major names in the industry looking to provide onchain exposure to new assets through Sierra’s infrastructure. We have been keeping this aspect of the Sierra Protocol quiet, but hope to be able to share more in the near future If you have been paying attention this far - stay tuned, we think you will like what we have to share. 

Summit PEAKS Program:

New this week to the Summit Program: participants can now earn Peaks through SIERRA’s Pendle markets! 

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. 

We announced one major change this month: the program will now run through September 30, 2026, instead of the previously targeted June 30, 2026. We are firmly committed to this new September 30, 2026 date, come hell or high water. 

We began the year with upgrades to the underlying infrastructure that took longer than initially anticipated. This unfortunately means we have been slower in adding the new reserve sources than initially expected, impacting our ability to offer the competitive product necessary to build traction. Those upgrades are now complete and we are back on track to turn SIERRA into the most attractive risk-adjusted yield opportunity in the market. 

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. 

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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 contributions to the Sierra Community! 

Sincerely,

Mitch and Kevin