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 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

• Total SIERRA minted reached $4.3M on Avalanche and $1.5M bridged to Ethereum 

• SIERRA’s yield averaged 5.14% for the month, positioning it very attractively against top competing Liquid Yield Tokens 

• The Summit Program is in full swing and will run through TGE, which will occur no later than June 30, 2026

• New user activation campaigns with boosted incentives paid out to Turtle members and new a multi-part activation campaign with Layer3

• The primary driver of TVL growth in January was from improving SIERRA's use as a treasury management solution for fintech companies seeking yield on their stablecoin balances

TVL and Yield: 

SIERRA is unique in its approach to abstraction, security, transparency and simplicity. SIERRA provides 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.

We saw a substantial increase in new SIERRA minted in January, with total TVL up 319% over the month, reaching a total of $4.3M. Of this, roughly $1.5M has also been bridged to Ethereum, bringing the total all-chain market cap of SIERRA to $5.8M. This growth was largely due to new inflows from a few sources, including:

• Hedge funds onboarding SIERRA as a risk-off ‘cash’ asset

• A DeFi protocol allocating some of its treasury to SIERRA

• A new user activation campaign with Layer3 and expanded campaign with Turtle

• A Latin American fintech allocating some of its treasury stablecoin balances to SIERRA

We are excited to see early examples of such a wide range of use cases for SIERRA, and expect to see growth continuing to ramp over the coming months.

SIERRA targets a competitive volatility-managed and risk-adjusted yield while maintaining maximum liquidity through primary and secondary market venues. As of January 31, SIERRA’s intrinsic yield was 5.06% APY, and returned 5.14% over the month on an annualized basis. Yields across the the industry began to compress into the end of the month, specifically driven by reductions in onchain borrowing activity and declining cryptoasset prices. At the time of writing, this trend has carried through into the earlier days of February.

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 onchain every 30 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

We made no substantial changes to the reserve portfolio in January, with the majority of reserves still allocated to Gauntlet’s USDC Prime vault on Base. The remainder was split across Wildcat (lending to Wintermute), Aave’s USDC market on Ethereum, and Fidelity’s Money Market Fund. This by no means reflects the end state of the portfolio and we have several upgrades planned over the coming weeks, including:

• Removal of the Wintermute vault on Wildcat

• Addition of a bespoke SOL-staking and basis vault built by OpenTrade in partnership with Figment

• Addition of investment-grade commercial paper, managed by FCA-regulated asset manager FiveSigma

• Addition of high-quality Pendle PTs

We will introduce these new yield sources gradually, and the resulting portfolio will be better diversified across a wider range of yield types, helping to deliver a yield profile that is more robust across changing market conditions. Importantly, portfolio liquidity remains very high. We have a few more updates on the roadmap, but will share those as we progress closer to implementation. 

As of January 31, Sierra’s reserve distribution was as 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 partnerships with the some of the best distribution in the space: 

Turtle is the leading liquidity distribution platform in the industry, partnering with teams to structure campaigns that help introduce new projects like SIERRA to retail and professional capital allocators. We kick-started this partnership in December, but added a little more juice to it in January, providing Turtle LPs an additional 3.5% in incentive rewards paid out directly in SIERRA. That program is available here for all to participate: https://app.turtle.xyz/earn/products/acfc65cd-ec7e-4f10-98d0-4c0a4b7b9a5e.

Layer3 is an activation protocol that aids in educating the market about newly launched projects. We partnered with Layer3 to provide a multi-step activation campaign, onboarding new users to the SIERRA ecosystem. This has been an early success thus far: more than 1300 participants learned about SIERRA, our social followers grew nearly 300% over the month, and onchain holders increased almost 500%. We welcome the new SIERRA holders to the community! 

Summit Program

As a reminder, we kicked off our points campaign, referred to as our Summit 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. 

Concluding Thoughts

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 please reach out if you would like to work together in any way. 

Sincerely,

Mitch and Kevin