Sierra Protocol Launches First Dynamically Rebalanced Liquid Yield Token on Avalanche

Sierra Protocol has introduced SIERRA, the first Liquid Yield Token (LYT) with dynamic rebalancing on the Avalanche network, marking a significant innovation in decentralized finance. The token, powered by OpenTrade's institutional-grade infrastructure, allows users to earn yield immediately without lock-up periods, minimum investments, or hidden fees.

Users can acquire SIERRA by swapping USDC on Sierra's web app or via LFJ (formerly Trader Joe), Avalanche's largest decentralized exchange. The token's reserves are backed by stablecoins and dynamically rebalanced across investment-grade real-world assets (RWAs), such as U.S. Treasury money market funds, and blue-chip DeFi protocols like Aave, Morpho, Euler, Wildcat, and Pendle, based on a proprietary risk framework.

Mitchell Nicholson, Core Contributor at Sierra Protocol, emphasized the token's unique appeal, stating, "Sierra's flexible reserve management strategy and dynamic rebalancing capabilities make it a unique offering that many DeFi users will prefer holding." The partnership with OpenTrade enables seamless yield allocation through a 'yield-as-a-service' model, with RWA collateral held in Tier 1 financial institution accounts managed by an FCA-regulated asset manager, and DeFi vaults secured via Fireblocks' whitelisting and policy enforcement.

A transparency dashboard provides real-time data on portfolio metrics, accessible via CSV or API downloads. Dave Sutter, CEO of OpenTrade, praised the collaboration, calling it a "fresh approach to liquid yield tokens" that enhances composability and security. The launch on Avalanche leverages the network's high throughput for efficient rebalancing, with Eric Kang of Ava Labs highlighting its role in simplifying on-chain yield access.