Spectra, a decentralized yield trading and farming protocol built on Ethereum, experienced a remarkable surge in December, increasing its Total Value Locked (TVL) by 600% to reach an impressive $143 million, according to DefiLlama. This significant growth marks a substantial comeback for Spectra, which had become inactive after retiring its project in the first quarter of 2023, according to a report on NFTGators. The protocol relaunched its version 2 in June 2024 and has been steadily expanding its presence in the decentralized finance (DeFi) space since then.
Source: NFTGators
As a multi-chain, EVM-focused platform, Spectra specializes in interest rate derivatives, allowing users to separate yield from their principal assets, tokenize it, and leverage these tokens for various trading and DeFi activities. This innovative approach draws inspiration from Pendle, the leading platform in yield tokenization with over $4.4 billion in TVL. For instance, Spectra enables users to lock in stable yields, such as a 5% APY on Aave’s stablecoin deposits, protecting them from fluctuating rates and ensuring predictable earnings over specified periods like six months or a year. The protocol utilizes Yield Tokens (YT) and Principal Tokens (PT), minted on top of ERC-4626 interest-bearing tokens, facilitating seamless trading and yield optimization.
Currently, USR, a decentralized USD-pegged stablecoin by Resolv, dominates Spectra’s deposit base with 58% of the TVL, followed by Wrapped Ether (WETH) at 27%. USR itself has seen its TVL reach a new high of $326 million, significantly up from the previously reported $77 million. Ethereum remains the backbone of Spectra’s ecosystem, contributing nearly $106 million in TVL, with additional support from Layer 2 solutions like Base, Arbitrum, and Optimism. This robust multi-chain strategy underscores Spectra’s commitment to providing versatile and secure yield optimization tools within the dynamic DeFi landscape.