Spectra, a decentralized yield trading and yield farming protocol, has surged over 600% in total value locked (TVL) in December, hitting a record $143 million on December 30, as per DefiLlama.
After retiring its project in Q1 2023, Spectra became dormant for more than a year. It launched its v2 protocol in June 2024 and has expanded since then.
Spectra is a multi-chain, EVM-focused protocol for interest rate derivatives. It allows users to separate yield from principal assets, tokenize it, and leverage it for trading or other DeFi activities. Today, the most popular platform for yield tokenization and trading is Pendle, with over $4.4 billion in TVL. The success of Pendle inspired other DeFi projects to facilitate yield operations.
For example, users who decide to supply a stablecoin on Aave at a 5% annual percentage yield (APY) may see their rate drop the very next day, affecting their expected earnings. By using Spectra, they can lock in the 5% rate for a specific period, such as six months or one year.
Spectra’s protocol primitives are the Yield Token (YT) and Principal Token (PT), minted on top of ERC-4626 interest-bearing tokens. For example, aDAI is an interest-bearing token offered by Aave, representing the DAI stablecoin along with all future yields. Spectra splits aDAI into PT-aDAI and YT-aDAI, enabling users to trade the latter.
Users can deposit interest-bearing tokens on Spectra pools to earn more yield.
USR currently accounts for the largest share of deposits, with 58%, followed by WETH with 27%.
USR is a decentralized USD-pegged stablecoin offered by Resolv, whose TVL reached a new record at $326 million. We reported over two weeks ago that it had a record $77 million in TVL.
With USR, WETH, and other tokens, Spectra is dominated by Ethereum, which has nearly $106 million in TVL. It is followed by Base, Arbitrum, and Optimism.
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