Use Cases & Examples
By the end of this article, you will have a clearer understanding of Spectra's potential benefits and flexibility and how it could become an integral part of your DeFi strategy.
Fixed Rate
Lock in the APY of your yield-generating position, removing any uncertainty about future returns.
Aave: For instance, if you supply 1000 DAI into the Aave protocol at a 4% APY, there's no guarantee that the rate won't drop the next day, resulting in lower earnings than initially predicted.
SolutiFew readersSpectra Overview
The Spectra protocol is permissionless, meaning its services are entirely open for public use. Anyone can create new markets at will, swap yield derivatives, or become a liquidity provider.
Below, you'll discover its key objectives and features.
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These docs are non-technical. If you are looking for more technical / developer-friendly documentation, see the Developer Docs.
Protocol Primitives
Spectra's Yield Token and Principal Token, minted on tFew readersFAQ
Principal Token (PT)
What are the main benefits of Principal Tokens? Obtaining Principal Tokens (e.g. PT-stETH) enables locking in the current APY of the respective interest-bearing token (e.g., stETH) for a fixed period until maturity. This approach provides a hedge against APY volatility, ensuring a fixed amount of underlying (e.g., ETH) is received at maturity.
How does Spectra ensure 1:1 PT redemptions for underlying at maturity? Spectra ensures each Principal Token (PT) iFew readersWhat is Yield?
As you navigate DeFi, the term 'yield' often pops up. In the most basic terms, yield refers to the earnings generated and realized on an investment over a particular period. These earnings can come from various activities such as:
Lending: Platforms like Aave, Compound, and Morpho.
Staking: Services such as Lido and EigenLayer.
Yield Farming: Platforms like Yearn, Harvest, and Beefy.
When you put your tokens to work on one of these platforms, you receive proof of deposit as aFew readers