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 outstanding: $35.3M on Avalanche and $28.4M bridged to Ethereum 

• Month-on-month TVL growth: 25%

• SIERRA PT yields: 10.5% and Pendle market size: $27M 

• Reserve additions: No major changes; continued to build out investment-grade commercial paper exposure

• SIERRA’s yield averaged 4.05% for the month - expect this to continue rising as we add a few additional allocations

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

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.

Following on last month’s 36% increase in TVL, SIERRA had another impressive month, adding another 25% into the product. Total SIERRA minted crossed $35M 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 May 31, SIERRA yielded 4.05% over the month on an annualized basis. 

Note the small dislocation in exchange rate and yield at the beginning of May. While this looks like there was a negative move, this was simply just a misalignment on accounting treatment for the PAAA ETF dividend - and that drop reflects the value of the dividend paid out that was not picked up in the vault AUM properly. We have made a minor adjustment to account for any dividend payments going forward. 

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 BASF (the world’s largest chemicals company), Disney, BP, Barclays and Honda:

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: 

The Sierra Managed LP vault, provided by OpenTrade, continues to be a major driver of SIERRA adoption. Fintechs, neobanks and exchanges allocate to managed SIERRA DeFi strategies (Uniswap and LFJ LP, Pendle LPs and SIERRA PTs) through 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. TVL in this product is now well above $20M in capital, while earning ~6.5-8% on average.

SIERRA’s Pendle market continues to perform well with strong activity on the PT and YT sides of the market. One new fund that allocated 7-figures into SIERRA PTs this month, locking in 10% yields, shared their perspective on why they found allocating to SIERRA attractive: “[we] think that SIERRA is one of the best examples of how tokenized yield should be brought into DeFi, backed by very high-quality assets”. That is absolute music to our ears and we are proud that a fund that did such deep diligence on SIERRA wanted to share that with us. So thank you!.

Summit PEAKS 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