# Spectra Overview Spectra is an EVM-centric protocol for interest rate derivatives with an easy-to-use flagship app. 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. {% hint style="info" %} These docs are non-technical. If you are looking for more technical / developer-friendly documentation, see the [Developer Docs](https://dev.spectra.finance/). {% endhint %} ## **Protocol Primitives** Spectra's Yield Token and Principal Token, minted on top of ERC-4626 interest-bearing tokens, are core protocol primitives. Spectra separates the right to principal from future yield via a process called yield tokenization. This process unlocks new financial possibilities beyond standalone interest-bearing tokens. ## **Core Use-Cases** * Permissionless Pool Creation * Fixed Rates * Yield Trading These key use cases can be abstracted into other narratives, such as upfront yield, discounted tokens, fixed savings, or fixed lending activities. ## **Key Objectives** * Empowering DeFi with a permissionless protocol for interest rate derivatives * Delivering cutting-edge solutions that can be seamlessly incorporated, built upon, and utilized by builders and other platforms in the DeFi ecosystem. * Upholding decentralization as a fundamental value, promoting community-driven growth via a DAO while the core team diligently and sustainably progresses the protocol ## Entity Breakdown Spectra is a decentralized interest rate derivatives protocol with different entities and individuals contributing to its development and adoption. * **Spectra Protocol:** A decentralized, permissionless interest rate protocol that permanently exists on the Ethereum Virtual Machine. * **The Spectra App**: a flagship interface that allows easy interactions with the Spectra protocol. Multiple protocol interfaces can exist. * **Spectra Governance:** A governance system for governing the Spectra Protocol, enabled by the APW token. * [Perspective SAS](https://www.perspective.fi/): A company that develops the Spectra Protocol and the Spectra App. # Use Cases & Examples Discover a wider range of Spectra uses cases followed by practical scenarios. 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. ### F**ixed 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. **Solution:** Use Spectra's Fixed Rates tool to lock in that 4% rate for a specific period (e.g., 1 year). ✅ Even if Aave's DAI pool drops to 2% APY, you'll continue to earn at the initially fixed 4% rate for the remaining 1-year period. This means you could double your yield compared to users who deposited DAI at the same time but didn't lock in the rates. **Lido:** Alternatively, suppose you hold 10 stETH with a current 5% staking rewards APY. With Spectra, you can lock in this rate for a defined period, such as six months. ✅ In this example, if the staking rewards APY decreases to 2.5%, you'll continue to earn at the initially fixed 5% rate for the next six months. ### Discounted Assets (a different way to look at Principal Tokens) Principal Tokens (PTs) are a product of yield tokenization, offering unique opportunities due to their discounted nature. When using the Fixed Rates tool, users receive Principal Tokens—assets with zero-coupon bond mechanics that provide a fixed return at maturity. {% hint style="info" %} Reminder: All Principal Tokens come with maturity dates. {% endhint %} **Simplified Example:** Using the Fixed Rates tool at a 7% APY with 1000 USDC will return 1070 PT-USDC. These 1070 PT-USDC represent a claim on 1070 USDC, e.g., one year from now. \ \ This can also be seen as buying USDC at a discount. Essentially, you are purchasing 1070 USDC for the current price of 1000 USDC, reflecting the fixed 7% return upon maturity. Below is a rough representation of how the value of Principal Tokens develops against their underlying as they mature: * When utilizing the Fixed Rate tool, 1070 PT-USDC will be worth 1000 USDC. * Halfway to maturity, 1070 PT-USDC will be worth approximately 1035 USDC. * At maturity, 1070 PT-USDC will be redeemable for 1070 USDC. ### Yield Trading **Morpho:** If you believe the current 4% APY on the lending protocol's USDC market will rise due to market conditions, you can acquire YT-mUSDC (Morpho's interest-bearing token for USDC is mUSDC). ✅ If the implied APY increases, you are entitled to greater yield accrual than what you initially paid for those YTs. ### Liquidity Provision Providing liquidity in Spectra offers the opportunity to earn from various yield sources: * Pool's swap fees * The native yield of the interest-bearing token token * Principal Token's fixed rate yield * Spectra's native APW emissions to pools * Incentives provided by 3rd parties ✅ It's a yield-generating strategy that allows anyone to earn more yield on top of their interest-bearing tokens. # What is Yield? This article explains crypto yield in simple terms, provides examples of its sources, and provides examples of how to manage it with Spectra. 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 an Interest-Bearing Token. For example, when you lend USDC to Aave, you receive aUSDC in return. This aUSDC represents your lent USDC and entitles you to the interest it accrues over time. In this case, aUSDC is the Interest-Bearing Token. Each platform has its version of an Interest-Bearing Token. For instance, Compound Finance provides cTokens, so you would receive cUSDC from Compound when depositing USDC. In general, an Interest-Bearing Token acts as proof of funds and entitles its holder to the accrued yield in addition to the initial investment. ### Detailed Examples of Yield-Generating Activities **Lending:** Lending protocols like Aave, Compound, and Morpho allow users to lend their crypto assets to earn yield. For example, when you lend USDC to Aave, you receive aUSDC in return. This aUSDC represents your lent USDC plus the interest it accrues over time. The yield is the interest you earn on your loaned assets. **Staking:** Staking is a broad definition that involves locking up tokens to support a platform's operation or liquidity in exchange for rewards. For instance, you can stake ETH via Lido Finance to earn rewards for securing Ethereum, receiving stETH as yield. **Yield Farming:** Yield farming involves navigating the DeFi landscape to maximize yield by leveraging multiple protocols. For example, you can put ETH into a yield farming protocol like Yearn Finance, which rebalances it across various lending protocols to get the best APY while earning YFI tokens as additional yield. #### Dealing with APY Volatility APY volatility is a significant factor when engaging in DeFi yield-generating activities. **Understanding APY Volatility** APY (Annual Percentage Yield) represents the yearly rate of return you can expect from activities such as lending, staking, yield farming, and liquidity provision. However, APY isn't fixed and can fluctuate due to factors like supply and demand dynamics, changes in liquidity, or protocol governance decisions. This constant fluctuation is known as APY volatility. **Impact of APY Volatility** APY volatility can significantly impact your expected yield. For example, suppose you supply USDC to Aave at a 10% APY, expecting to earn 10% on your investment over the year. However, due to changes in market dynamics, the APY drops to 5% after a month. Your overall return will be much less than initially anticipated, affecting your yield and financial planning. APY volatility adds uncertainty to your investment strategy, making financial planning challenging. **CoinMarketCap for Interest-Bearing Tokens & APY Volatility** We are all familiar with CoinMarketCap and CoinGecko, the crypto world's primary sources of token prices. They provide essential information for traders and investors to make informed decisions. Similarly, understanding the volatility of APY in DeFi can help investors manage their yield expectations and adjust their strategies accordingly. Is there a similar platform for tracking Interest-Bearing Tokens and their APY volatility? The answer is yes—meet [**DeFillama's Yield Page**](https://defillama.com/yields)**.**
Key metrics include Base APY, 30-day average APY, and the accompanying chart. Each asset listed on DeFiLlama has a dedicated page, providing a more detailed chart and showcasing its APY evolution.
### ERC4626 - Standardized Interest-Bearing Tokens [ERC4626](https://eips.ethereum.org/EIPS/eip-4626) is an extension of [ERC20](https://eips.ethereum.org/EIPS/eip-20) that proposes a standard interface for tokenized vaults. This standard allows different protocols (lending, yield, staking, etc.) to have a common interface to enter and exit such vaults and standardized getters to compute the APY. An ERC-4626 can have multiple sources of yield in addition to the base APY, such as native token rewards or points. {% hint style="success" %} **Explore the APY of any ERC4626 with Vision.** Make informed decisions and visit [vision.perspective.fi](https://vision.perspective.fi/) to gain access to the Vision API and dashboard to explore the historical interest rates of any ERC4626. {% endhint %} ### Harnessing APY Volatility with Spectra Equipped with knowledge of yield sources, Interest-Bearing Tokens, and their volatile nature, let's explore how you can leverage Spectra to unlock more possibilities on top of your interest-bearing tokens.**The Problem:** An interest-bearing token represents both the principal (initial deposit) and the right to its future yield in a single piece. **The Solution:** Spectra splits an Interest-Bearing Token into two parts: Principal Token (PT) and Yield Token (YT). This process, known as 'yield tokenization,' unlocks new financial possibilities beyond standalone Interest-Bearing Tokens, such as: * **Fixed Rates** * **Yield Trading** * **Upfront Yield** * **Discounted Assets** Learn more about what you can do with Spectra in the [Use Cases & Practical Examples](https://docs.spectra.finance/the-basics/use-cases-and-practical-examples) chapter. # FAQ This article answers the most common questions about Principal and Yield Tokens, pool creation, and other protocol mechanics. ### Principal Token (PT) 1. **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.
2. **How does Spectra ensure 1:1 PT redemptions for underlying at maturity?**\ \ Spectra ensures each Principal Token (PT) is backed by a quantity of interest-bearing tokens (IBTs) equivalent to a fixed amount of the underlying asset at maturity unless there is a negative yield.\ \ While the protocol doesn't hold underlying tokens directly, it maintains that 1 PT can typically be redeemed for the underlying asset at maturity, except in cases of negative yield originating from the underlying layer (a project or protocol)
3. **Can I sell my Principal Tokens (PTs) before maturity?** \ Principal Tokens can be sold before maturity, either back to the pool or on secondary markets. The amount of underlying received will depend on the available liquidity at the time of the transaction.
4. **What happens to my Principal Tokens at maturity?**\ \ At/after maturity, each PT can be redeemed in a 1:1 ratio with its corresponding underlying token. For example, 1 PT-stETH can be redeemed for 1 ETH, assuming no negative yield. After the redemption, the PT token is burned.
5. **Can I choose the maturity date when fixing rates?** \ A precise maturity (redemption) date cannot be selected using tools like Fixed Rates. Users can only choose between fixed-rate products listed on the Fixed Rate page, with various maturity dates pre-defined by their respective pool creators. ### Yield Token (YT) 1. **What are the main benefits of Yield Tokens?**\ \ Yield tokens (e.g., YT-stETH) are derivatives that offer exposure to the yield volatility of its interest-bearing token (e.g., stETH), akin to how holding a token like ETH exposes you to its price volatility.\ \ Holding onto Yield Tokens entitles the holder to ongoing yield accrual. If the live iBT APY increases while holding the Yield Token, the holder will be entitled to greater yield accrual.
2. **What happens to my Yield Tokens when they expire?**\ \ The value of the Yield Tokens trends toward 0 as they approach expiry. Throughout their lifespan, YT holders continuously accrue yield, which can be claimed at any point before or after their expiration. \ \ When YTs expire, no further action is needed besides claiming the remaining (or fully) accrued yield. ### Liquidity Pool (LP) 1. **What are the main benefits of the LP token?**\ \ The LP token is obtained by users who provide liquidity to or create a Spectra pool. It acts as a receipt, allowing its holder to claim their initial funds plus accrued pool fees. \ \ There are up to 5 yield streams in the LP token holders are exposed to:\ \ \- Pool's swap fees \ \- The native yield of the interest-bearing token token\ \- Principal Token's fixed rate yield \ \- Spectra's native APW emissions to pools \ \- Incentives provided by 3rd parties
2. **Can I withdraw my LP token at any time?**\ \ Yes, withdrawing LP tokens is possible anytime before the pool's expiry. {% hint style="info" %} Withdrawing from a pool before expiry can be done either one-sided or two-sided. The one-sided option, which involves converting LP tokens back to a single asset, may incur slippage and is subject to available liquidity. {% endhint %} 3. **What happens to the LP token when the pool expires?** \ \ When the pool expires, LP holders can unwind to the underlying or interest-bearing token (IBT). This process is not subject to liquidity constraints since Principal Tokens (PTs) can be fully redeemed at maturity. ### Pool Creation 1. **How do I create a pool on Spectra?**\ \ Spectra offers permissionless pool creation. To start a pool, a user needs any amount of a compatible interest-bearing token that adheres to the [ERC-4626 standard](https://erc4626.info/) or is Spectra-wrapped.
2. **What is the pool's maturity?**\ \ Maturity is a key pool parameter that sets the expiration date for yield derivatives. Depending on the pool creator's needs, it can range from 2 days to decades. 3. **What is the target APY, and how do I source it?**\ \ The target APY is an estimate of the average annual percentage yield the pool aims to achieve over its lifespan.\ \ To determine the target APY, the pool creator can utilize the native interest-bearing token (iBT) platform to check its current and historical APYs. Cross-referencing this data with reliable DeFi yield trackers, such as DefiLlama, provides a comprehensive view. Here's an example:
4. **Can I set the pool fee parameter?**\ \ The Spectra App automatically adjusts the pool fee based on the `Target APY` and `maturity` parameters to enable an efficient trading environment. {% hint style="info" %} Advanced users can customize the pool fee parameter through the contracts. {% endhint %} 5. **What are the components of the output area?**\ \ The pool creator receives an LP token composed of iBT and Principal Token. Yield Tokens are the result of the yield tokenization process; however, they are not a part of the pool composition. \ \ LP token holders remain entitled to fees from Yield Token (YT) swaps as they are driven by flash swaps utilizing the PT<>iBT pool.\ \ After a successful pool creation, LP and YT tokens are displayed in Portfolio under their respective tabs. Pool creators can sell YTs (subject to slippage) or continue earning yield by holding them. {% hint style="info" %} The pool's displayed APY does not include the Yield Token's ongoing yield accrual. {% endhint %} ### Liquidity Provision (Addition) This section covers cases for adding and removing liquidity from an existing pool. 1. **How does the liquidity addition to an existing pool differ from the pool creation?**\ \ Users providing liquidity to an existing pool do not need to set the `Target APR` and `Maturity` parameters; these actions are typically reserved for more advanced users. \ Additionally, users joining an existing pool can:\ a) Use either iBT or the Underlying as input \ b) Use the NPIM (No Price Impact Mode) to convert the whole input into the LP token or keep YT tokens aside. {% hint style="info" %} For larger liquidity additions, using NPIM \[ON] can help avoid slippage associated with one-sided liquidity additions. {% endhint %} 2. **How do I collect pool fees from liquidity provision?**\ \ Liquidity providers accrue pool fees directly into the LP token, reflected in the pool's share holding more IBT/PT.
3. **How do I collect and claim rewards (incentives) when providing liquidity?**\ \ In addition to pool fees, liquidity providers are entitled to the protocol's native APW emissions and 3rd party incentives.\ \ A liquidity provider can claim earned APW rewards and incentives via a single drawer on the Spectra App by entering the Portfolio -> Liquidity tab -> LP position's \[Manage] button -> Claim Rewards. The 3rd party rewards can be claimed ### Liquidity Provision (Removal) 1. **Is it possible to withdraw liquidity from the pool at any time?** \ In most cases, users who join an existing pool can remove liquidity anytime with negliglible or zero slippage. \ \ **Users with significant or full pool ownership** who remove liquidity before the pool's maturity are subject to available liquidity without NPIM. \ \ To avoid slippage, using NPIM mode allows liquidity providers to receive iBT and PTs.
2. **What happens if APW rewards and incentives are not claimed after removing liquidity?**\ \ After withdrawing all LP tokens from a pool, a user can still claim its previously accrued APW and incentives via the \[Claim All] button at the top of the portfolio page.
3. **Can I partially remove liquidity from the pool?**\ \ Yes, it is possible to remove liquidity partially from the pool.
4. **Should NPIM (No Price Impact Mode) be used when removing liquidity?**\ \ With the NPIM toggle turned ON, the output consists of interest-bearing tokens and Principal Tokens (the two components of the LP Token). In this scenario, users must wait for the PT's maturity to realize the underlying in a 1:1 ratio.
With the NPIM toggle turned OFF, the output consists solely of interest-bearing tokens or the underlying asset. In this scenario, the PTs are swapped into iBT (or the underlying asset) at the available liquidity. ### Other 1. What is an event of a negative yield?\ \ It is possible that ERC-4626 interest-bearing tokens (IBTs) may experience a decrease in their underlying share value. In such cases, the underlying backing of Principal Tokens (PTs) will decrease proportionally to maintain the protocol's solvency. \ \ This is the inverse of the share value increasing, which would result in yield that Yield Token (YT) holders could claim. Negative yield events reduce the amount of underlying assets backing each PT, impacting the value PT holders can redeem at maturity.
2. **What is the impermanent loss like inside the pool?**\ \ Impermanent loss (IL) is the difference in value between your holdings in the AMM pool and the asset(s) initially deposited. On Spectra, there are multiple assets to provide liquidity with (underlying, IBT, or tokenizing into PTs and YTs), and each method results in a different way of computing IL. However, several factors make IL negligible in most cases: * PTs are redeemable for one underlying value at maturity (unless there is a negative yield) * IBTs increase in underlying value within the pool * PT and IBT values are highly correlated
3. **What is the difference between PT's maturity and LP/YT's expiry?**\ \ These terms are synonymous; both refer to the pool maturity date set by the pool creator. # About - Core Concepts A vault layer on top of permissionless fixed-term markets. MetaVaults introduce a **curated vault layer** on top of permissionless fixed‑term pools, addressing UX challenges that arise when pools expire. Rather than interacting with separate pool addresses for each maturity, liquidity is consolidated into a single vault that remains live across maturities. A dedicated curator manages re‑allocations, rollovers, and new pool creation. Suppliers receive a single receipt‑style token that tracks pro‑rata ownership and accrued yield. MetaVaults implement asynchronous ERC‑7540 vaults, using **request → settle → claim** flows for supply and redemption actions. This design allows curators to batch requests and maintain clean accounting while the vault compounds yield. ### Why MetaVaults matter MetaVaults solve key frictions in fixed‑term yield markets: * **Expiry friction.** In traditional fixed‑term pools, each maturity requires a new pool address and re‑bootstrapping liquidity. MetaVaults eliminate these cycles by rolling liquidity into new pools as maturities end, maintaining continuous exposure. * **Clearer earnings.** Classic LP tokens can fluctuate with market swings, obscuring yield. MetaVault receipt tokens reflect the vault’s share price directly, making yield tracking straightforward. * **Continuous market depth.** Consolidating liquidity prevents fragmentation and helps sustain deep markets across pool cycles. * **Passive supply experience.** Suppliers do not interact directly with pools nor Yield Tokens; yield is accrued and periodically redirected into additional LP tokens by the curator, creating a compounding effect. ### Benefits Breakdown for All Spectra Ecosystem Actors MetaVaults deliver tailored advantages to every participant, creating a virtuous cycle of engagement and growth: * **Liquidity Providers (LPs):** A single supply action grants continuous exposure. Instead of managing Pool LP and YT positions, suppliers hold one receipt token that records ownership and compounded yield. YT yield can be periodically turned into more LP tokens, contributing to a compounding effect. * **Projects and Asset Issuers:** No more repetitive pool-deployment announcements and TVL drops at expiration. MetaVaults provide a permanent vault address for effortless integrations, user onboarding, and communications. Curators can operate vaults on behalf of projects, ensuring consistent liquidity and momentum without periodic market resets. * **Curators:** a formal curation layer introduces a new on‑chain business model in the yield tokenization sector. Curators manage liquidity allocation across pools, earn transparent fees, and build reputations through performance. * **Traders:** Seamless liquidity transitions across fixed-term pools result in a greater pool depth over time. MetaVaults ensure efficient trading continuity, setting the stage for upcoming features like the order book. * **For the Spectra Protocol:** Consolidated liquidity promotes resilient TVL growth and deeper markets. The curator layer enhances business development and integration opportunities. # Getting Started MetaVaults implement asynchronous ERC‑7540 vaults, using request → settle → claim flows for supply and redemption actions. #### Supply flow (request → settle → claim) 1. **A deposit request can be submitted via the following panel found on the MetaVault pages:**
Via the following module, a deposit request can be submitted. Liquidity is then transferred out of the user's wallet and remains pending until the next vault settlement. The user can cancel the request at any time; once confirmed, the liquidity is returned to the wallet instantly.
Portfolio preview of a "Deposit Pending" status
2. **Settlement by the curator.** At scheduled intervals, the curator settles the vault. Pending supply requests are converted into MetaVault shares based on the current share price. Once the settlement is processed, the Portfolio page will display the following information:
3. **Claim the receipt token.** After settlement, claim the MetaVault receipt (MV) token from the interface. This token represents pro‑rata ownership and increases in value as yield accrues.
**Yield accrues once a supply request has been included in a settlement. Claiming the receipt token is not required for accrual, but is necessary to submit withdrawal requests and to use the MV token in other DeFi integrations.** #### Withdrawal flow (request → settle → claim) 1. **Request a withdrawal.** A withdrawal request requires holding the MV receipt token.
2. **Queued until settlement.** The curator prepares the withdrawal during the next settlement by using idle liquidity or unwinding positions.
3. **Claim withdrawn liquidity.** After settlement, claim the redeemed assets from the MetaVault page.
### Neutral State A settled position within a MetaVault is reflected as such under the Portfolio tab in the Spectra App:
### Partial States When a user adds more liquidity to an existing MetaVault position or requests a partial redemption, blipping icons appear in the ***Balance*** columns. The blinking orange icon indicates an action is pending settlement, while the green dot indicates a pending manual user interaction.
### Vault Performance Area As of February 2026, each MetaVault page is equipped with key performance information: * :orange\_circle: sharePrice - represents the **exchange rate** between the vault's internal share tokens and the underlying assets (e.g., USDC or ETH) it holds. * :green\_circle: Max APY - max. obtainable MetaVault rate, considers veSPECTRA boost, inherited pool rewards, and direct MV rewards
Under the chevron dropdown, TVL evolution of the MetaVault can be previewed
### Pool Allocations
Under this section, live MetaVault's allocations to pools can be previewed. * Allocation - percentage of the MetaVault's TVL allocated toward a specific pool * Vault Supply - dollar-denominated allocation size of the MetaVault's TVL toward a specific pool * Expiry - Pool's maturity date **Allocation Details**
On hover, a further allocation breakdown is available, comprising the pool's LP token, its PT and YT derivatives, and the underlying interest-bearing token. ### Technical Details
Each MetaVault is equipped with essential information, including curator entity details, vault's deployment data, access network, and an indicator on whether the MetaVault can allocate to Spectra Pools cross-chain. The timelock duration indicates how long the upcoming MetaVault updates will take to take effect. The Pending actions dropdown displays details on upcoming MetaVault changes, such as a new pool addition. At the bottom, the vault address is displayed - allowing anyone to preview onchain actions within the MetaVault. # Permissionless Pools Liquidity providers are integral to any DeFi protocol, and Spectra is no different. A distinctive feature of Spectra Protocol is permissionless pool creation. The protocol allows users to create pools by supplying ERC4626-compatible interest-bearing tokens. Providing liquidity to Spectra offers the opportunity to earn from swap fees while keeping liquidity providers entitled to yield accrual and all sorts of incentives. At the root level, the Spectra protocol is where three market actors converge: \#1 - Actors who anticipate the rates will go up \#2 - Actors who anticipate the rates will go down \#3 - Actors looking to earn fees from the activities of the first two groups.\ \ Those activities come by various names: yield trading, fixed rates, upfront yield, etc. Fundamentally, Spectra applies a fee to every token exchange on the protocol, creating a source of yield for those supplying liquidity. ### Pools on Spectra Pool creation on Spectra is permissionless, meaning there is no voting or human-gated process. Anyone can open a pool with any amount of [ERC-4626 compatible](https://tvl.erc4626.info/) interest-bearing tokens and earn fees from powering all sorts of protocol activities. \ When creating a pool, in addition to supplying the initial liquidity as an interest-bearing token, the user needs to specify its maturity date and target APR—more on this in the [App Help](/app-help/fixed-rates) section. ### Sources of Yield Liquidity providers in Spectra pools are entitled to the following yield streams originating from: * Pool's swap fees * The native yield of the interest-bearing token token * Principal Token's fixed rate yield * Spectra's native APW emissions to pools * Incentives to pools provided by 3rd parties Plus, any potential rewards emitted by underlying platforms to holders of ERC-4626 tokens. ### Pool Infrastructure Spectra is AMM agnostic. Initially, it leverages battle-tested Curve pool infrastructure to power efficient protocol swaps. ### Future Implementations One limitation of Spectra's current pool model is the expiry date, which means providing liquidity isn't completely passive. The upcoming introduction of the MetaVault model addresses this by enabling automatic liquidity rollovers. # Principal & Yield Token Principal Tokens (PTs) and Yield Tokens (YTs) are the core primitives and components of the Spectra protocol, also called as yield derivatives. Decentralized Finance (DeFi) is built on layers of protocols that enhance each other's functionalities. Spectra introduces a new financial layer to established protocols like Aave, Compound, or Yearn. **Take this as an example:** 1. MakerDAO mints DAI tokens. 2. Aave takes DAI and wraps it into its Interest-Bearing version, aDAI. 3. Spectra splits Aave's aDAI into Principal Token (PT-aDAI) and Yield Token (YT-aDAI). Principal and Yield Tokens are derivatives on top of Interest-Bearing Tokens (IBTs) supplied by liquidity providers.\ \ Below is a simplified illustration of how yield derivatives are minted on top of an interest-bearing token.

This is a simplification of how PT and YT derivatives are created.

This process, known as '**yield tokenization**', separates future yield rights from the initial deposit. It unlocks new financial possibilities beyond standalone Interest-Bearing Tokens, such as: * Yield Trading * Upfront Yield * Fixed Rate * Discounted Assets ### **Main Characteristics** **Principal Token:** * Represents the initial deposit, also known as the principal * Redeemable 1:1 for underlying at maturity; trading at a discount until maturity, provided no negative yield. * Adheres to ERC-20 token standard; freely transferable **Yield Token:** * Represents the right to future yield * Accrues yield for its holder * The value of the YT itself heads toward 0 until the expiry date * Adheres to ERC-20 token standard; freely transferable Expiries provide clear timeframes for when these tokens can be redeemed or their rights exercised, enabling more precise financial planning for users, traders, and liquidity providers. {% hint style="info" %} **👍** Users are presented with maturity (expiration) dates when interacting with the Spectra App. {% endhint %} **PT-Example:** \ A user purchases 1050 PT-aUSDC for 1000 USDC, with a maturity date of 6 months. At maturity, they can redeem 1050 USDC, thus securing a fixed profit of 50 USDC. \ \ That same user can also sell 1050 PT-aUSDC before maturity back to the pool. The amount they receive, however, depends on market factors such as available liquidity and prevailing market prices. **YT-Example:** \ Bob buys 1 YT-stETH for \~0.13 ETH at an implied 15% APY, with an expiry one year from now. Consider these scenarios after 1 year: * If realized APY is 10% -> Bob accrued 0.10 eth in yield, which results in a net loss of 0.03 eth \[0.13-0.10] * If realized APY is 15% -> Bob accrued 0.15 eth in yield, which results in a fixed-rate alike return of 0.02 eth \[0.15-0.13] * If realized APY is 20% -> Bob accrued 0.20 eth in yield, which results in a net gain of 0.07 eth \[0.2-0,13] {% hint style="info" %} These are simplified scenarios. The actual outcomes may vary depending on factors such as maturity or liquidity available. {% endhint %} Yield Tokens can be sold, and their accrued yield can be collected anytime. # Articles & Links Continuosly updated list of useful community resources. * [Ultimate Guide to Spectra Pools](https://mirror.xyz/spectraprotocol.eth/TXg7yic6bLsfOyIGIelng69sljcCNE99EaqPjYuL8zQ) # Spectra Content Guide \[For Projects & Content Creators] This guide helps you get your Spectra communications right so we can amplify and engage with them promptly without getting lost in edits. It's an open document for teams and content creators. What you'll find here: * What Spectra is in a nutshell * Key Terminology * What language to avoid * Copy-paste-ready language blocks * Navigating Spectra's App Data * Successful content examples of other teams ### What Spectra Is (In a Nutshell) If you’re reading this, you likely know what **Uniswap** is - a protocol and a platform where anyone can swap token A for token B, instantly and permissionlessly. **Spectra works similarly, with users swapping yield tokens with two different interest rate exposure profiles.** \ \ Spectra separates yield-generating tokens (like Lido's stETH or aUSDC) into **two parts**: * 🟢 **Principal Token (PT):** Fixed-rate exposure - example: PT-aUSDC - bearish outlook * 🟣 **Yield Token (YT):** Floating-rate exposure - example: YT-aUSDC - bullish outlook The Spectra App itself offers two native products based on these primitives for users to obtain them: * **Fixed Rates** (for locking in predictable returns) * **Yield Leverage** (for speculating on variable yield or farming points) PTs and YTs can be framed in more user-friendly ways depending on your audience:\ \ PTs = Fixed savings, fixed income, discounted token\ YTs = Points multipliers, boosted yield, interest rate bets We'll share examples of framing those products later in the article. ### Terminology **Interest-bearing Token \[iBT]**—Example: aUSDC—a token entitled to yield / deposit receipt of your product, which is then used to power the Spectra pool. Typically, this is an [ERC-4626](https://ethereum.org/en/developers/docs/standards/tokens/erc-4626/) vault that comes with an underlying token. **Underlying** - Example: USDC - a classic ERC-20 token, the base asset from which an interest-bearing token (iBT) derives its value. Principal Token's redemptions are denominated in the underlying token. **Pool Maturity Date -** The predefined date when PTs mature and can be redeemed and YTs expire. **Yield Leverage -** The effective notional exposure you get when buying YTs. If $1 buys a YT that gives $10 worth of yield exposure, the yield leverage is 10x. It changes with market dynamics. ### **What language to avoid in your comms** Spectra is a permissionless protocol - anyone can launch a pool, just like on Uniswap. That means when a pool goes live on Spectra, it doesn’t automatically signal a formal partnership or collaboration with Spectra. **General announcements** #### ❌ Avoid: * **"Partnered with Spectra"** * **"In collaboration with Spectra"** * **"Backed by Spectra"** #### ✅ Use Instead: * **"Our \[token] is now live on Spectra!"** * **"We’ve integrated Spectra’s PTs/YTs into our product"** * **"...built on/with Spectra’s infrastructure"** * **"Powered by Spectra"** * **"You can now get a fixed rate on \[your\_token] via Spectra"** **Describing a Spectra pool / LP opportunity:** ❌ **Avoid:** * **“Earn fixed yield with Spectra pool”** – Spectra pool yield isn’t fixed; it fluctuates with swaps and liquidity shifts * **“Start farming with Spectra pool”** – Spectra pools generate intrinsic yield from trading activity, not traditional yield farming * **“Deposit and earn 10% APY”** – Avoid presenting pool APY as fixed. Rates change with every trade or new liquidity deposit ✅ **Use Instead:** * **“Earn extra/more yield on your \[USDC/aUSDC] with our Spectra pool”** * **“Deposit and earn a \~10% APY”** – The `~` sets the right expectation: rates vary * **Supercharge your \[iBT] yield with fees from our Spectra pool** and *protocol incentives*\*\ `*` Only include the incentive line if emissions (e.g. `SPECTRA`) are active. If not, simply say:\ → **“...with fees from our Spectra pool”** 💡 **Tip:**\ Mentioning only the interest-bearing token (e.g. `aUSDC`) speaks directly to your existing users who already hold and are familiar with it. But if the underlying asset (like `USDC`) is widely recognized, include it instead, or both, in your messaging. This helps widen your reach—especially on social channels—and may attract regular `USDC` holders who can also join the pool and benefit from its yield mechanics. #### Describing a Principal Token (PT) Opportunity ❌ **Avoid:** * **“Stake PT-aUSDC to earn yield”** – PTs don’t need staking. The return is built into the discount * **“PTs earn interest over time”** – PTs don’t accrue like savings accounts. Return is fixed and realized at maturity * **“Earn up to 15% APY with PT-aUSDC”** – Use APR, not APY. PTs are non-compounding * **“Guaranteed returns”** – Don’t use the word "guaranteed".\ PTs aim to redeem 1:1 at maturity with the underlying token, but if the underlying protocol suffers an exploit, default, or negative yield event, Spectra will adjust redemption rates to remain solvent ✅ **Use Instead:** * **“Lock in a fixed rate with PT-aUSDC, redeemable for 1 USDC at maturity”** * **“Buy future dollars at a discount—PT-aUSDC currently at \~$0.91”** * **“Secure a \~12% fixed APR by holding PT-\[iBT] until \[maturity date]”** * **“Get a fixed rate on ETH via \[link to the Fixed Rate tool of your pool]”** * **“Predictable ETH yield? Our Spectra PTs give you that without floating rate headaches”** 💡 **Tips:** * **Use APR, not APY.** PTs don’t auto-compound. APR reflects the actual fixed return without reinvestment. While the Spectra app displays APY for illustration (as if users rolled over into a new PT with identical pool terms), it’s a hypothetical scenario. Stick with APR for the best user expectations. * **To get the APR for your messaging:**\ Enter a small amount (e.g. $10) into the PT input field in the Spectra app. The module will calculate and display the current APR based on available pricing:
❌ **Avoid:** * **Farm and chill with YTs** - quite the opposite, YTs require active awareness * **Stake YTs on Spectra** - there's no staking involved, YT are held in wallet and position performance is reflected in the Spectra App * **Convert \[ibt] into PT/YT, sell PT, and maximize exposure to ibt yield** - no need to split the interest-bearing token into PT and YT just to sell the PT after. YTs can be obtained directly via the Yield Leverage tool via the Spectra App :white\_check\_mark: Use Instead: * x10 your exposure to \[iBT] native yield & points with Spectra's Yield Tokens * Yield Tokens = leveraged bet on yield & points of \[iBT] * $1 gets you exposure to 10 aUSDC yield & points - an x10 exposure leverage with YTs * Thinking that \[your product/protocol name/ibt] yield increases - YTs let you capture the upside 💡 **Tips:** * **YT demand = PT discount.** The more people chase YTs (e.g. for airdrops), the cheaper PTs get—highlighting YTs can indirectly draw attention to juicy fixed-rate deals on the other side. * **YT performance is ideal for airdrop/points narratives.** Frame it as a tool for those who want to **max out exposure** and take on more risk in exchange for potential upside (points, rewards, variable yield). * **YT returns are not predictable.** Avoid quoting APYs or expected returns. If needed, give a **range** or historical example, and clearly mark it as past performance. * **YT value decays over time while earning its holder yield at the native rate +** points (if in play) As the pool nears maturity, remaining yield potential shrinks—this is normal. Communicate this to avoid users thinking their YTs are "broken" * Terminology: Yield Tokens *expire* & Principal Tokens *mature -* both adhere to the same pool maturity date ### Copy-Paste-Ready Blocks **General Integration Announcements** * \[token] is now live on Spectra!\ \ Unlocking new use cases - fixed rate and leveraged exposure to \[token]. Liquidity providers can put \[token/iBT] into the pool to earn swap fees *and protocol rewards\** * Our \[token] pool is now live on Spectra!\ \ PT -> Get predictable \[iBT] yield \ YT -> Get yield and points\* leverage to \[iBT]\ LP -> Earn on \[token/iBT] with yield from pool fees, protocol rewards\* & points\ \ \* if applicable **Fixed Yield / PT-Focused Messaging** * Lock a **fixed rate** on \[iBT] by purchasing PTs on Spectra. * Obtain a predictable yield on \[iBT] with Principal Tokens - no stress about interest rate fluctuations.
**Discounted nature of PTs** * **Pay 0.95 ETH today and redeem for 1 ETH on \[maturity date]**\ PT-\[token] lets you lock in a fixed return—pay less now and redeem the full amount at maturity.\ Fixed and predictable.\ \ Example: Pay 0.95 USDC today, redeem for 1 USDC at maturity = predictable APR.\ Example: Pay 0.97 ETH today, redeem for 1 ETH at maturity = predictable APR.\ Example: Get discounted USDC for $0.95 and redeem for 1 USDC on \[maturity date] 💡Reverse discount calculation - insert 1 underlying unit into the input field
1-0.09070 = **0.9093** \[Input - Fixed Maturity Yield] = **discount** value you can use in comms #### **YT-Focused Messaging – Speculation & Exposure** * Looking to bet on rising interest rates? **YT-\[iBT]** gives you leveraged exposure to variable yield of our \[iBT/product name/protocol] * Yield Tokens are for users who believe that \[iBT/product/protocol] yield will increase **YT + Points Farming / Airdrop Narrative** * Maximize points & yield with Yield Tokens, currently offering up to \[xyz] leverage exposure * YTs - your access to our \[points\_name] farming with leverage - high exposure at low cost * YTs give you exposure leverage; currently $1 worth of Yield Tokens gives you notional exposure to 10 aUSDC units - a 10x yield exposure leverage for every dollar spent find your 'up to' leverage exposure the following way:
#### **General Pool/LP Opportunity Messaging** * Deposit \[iBT/underlying] and earn on every PTs and YTs swap - generating fees that boost your yield. * Support our ecosystem and provide liquidity to the \[ibt/underlying] pool on Spectra * Earn on your \[iBT/token] by putting it to work into our Spectra pool: \[link] ### Navigating Spectra's App Data The 🔵 **Base APY** reflects the 7-day trailing yield of the interest-bearing token (e.g. sDOLA) — this is your product’s native rate. The 🟢 **Implied APY** shows what the market believes the fair rate should be, based on trading activity between PT and YT. It’s shaped by supply/demand dynamics on Spectra.
**Pool APY Breakdown** An LP token on Spectra consists of two components: * the **interest-bearing token** (e.g. sDOLA) * its **fixed-rate PT counterpart** (e.g. PT-sDOLA) As an LP, you’re effectively underwriting both market sides: fixed-rate seekers and variable yield speculators. In the example above, the pool holds **59.48% sDOLA (iBT)** and **40.51% PT-sDOLA**. That’s why the **effective sDOLA APY for LPs shows as 5.50% in the Pool APY Breakdown**, not the full 9.26% from the chart's :blue\_circle:line readings. It’s a weighted outcome — **9.26% × 59.48% =5.5%**. In short, the pool’s composition directly determines how much of the iBT yield an LP actually earns. The **PT Fixed Rate** listed reflects the fixed yield tied to the PT side of the pool — it’s what LPs earn from holding PT-sDOLA, which currently sits at **5.02%**. Even though the rate is fixed per PT, its impact on LP yield shifts with the pool composition as trades happen. i.e. when someone buys PTs from the pool, then the LP token encapsulates less PT and more iBT. Then there's **LP Fees** — yield generated from users trading PTs and YTs. And finally, **LP Rewards**, which are SPECTRA emissions used to bootstrap new pools by rewarding and attracting LPs, especially early on when trading activity is still low. In our example, holding standalone sDOLA would earn a 9.26% APY, as shown by the latest chart reading. However, putting that same sDOLA to work in the Spectra pool yields a stronger outcome. The LP position currently earns 5.50% from the iBT portion, plus 5.02% from its PT counterparty, totaling 10.52% from the pool’s core components. Adding 1.08% in LP trading fees brings the total to 11.60% APY — and that’s without even factoring in any SPECTRA incentives yet. :bulb: Tips & Remarks * Yield Tokens (YT) are not part of the pool composition as they expire at maturity and become non-transferable. Still, they are sourced from the iBT/PT pool via a flash swap mechanism. This is a technical nuance that does not need to be communicated but is worth keeping in mind. * It might take a while for the chart to print a smooth pattern. If your interest-bearing token produces yield at a frequency less than every 7 days, the Base APY chart line won't appear. If your iBT produces yield frequently but the Base APY line isn't there still, it could mean that your interest-bearing token contract is less than 7 days old - double check with your team! * For additional points in the Pool APY Breakdown - contact our team and we'll label them accordingly. * On SPECTRA emissions and Gauges system, refer to this [article](https://x.com/justz_eth/status/1903113365330743445) * On designing a successful points program for your Spectra pool - [article](https://x.com/justz_eth/status/1887916395943399606) * If the Spectra App doesn’t recognize your token icons, send them over — ideally in **.svg format** — and we’ll update them quickly * Created a Spectra pool? Feel free to announce it yourself and integrate PT/YT derivatives however it fits your product. If you’d like **@Spectra\_Finance** to engage with your comms, give us a heads-up and include a draft (Typefully link preferred) so we can verify the data and technical facts are accurate ### Successful Twitter content examples of other teams #### 🧭 Getting Started / Explainers * LevelUSD’s contributor on using their Spectra pool:\ * Quote-reply to Spectra's official announcement by LevelUSD explaining LP, YT & PT tokens:\ *** #### 🚀 Pool Creation & Progress * DarrenCamas on pool creation and progress:\ * Pablo Veyrat on creating a new Spectra pool:\ *** #### 📈 Growth Highlights & 🏁 Milestones * LevelUSD TVL growth\ \ * StakeDAO milestone with Spectra pool\ * Nemi from Levels highlighting their points program applied to Spectra tokens\ *** #### 🔍 Use Cases & Volume * Pablo Veyrat spotlighting use cases:\ *** #### 📊 Gauges, Proposals & Incentives * Gauge proposal creation by fiddy\ * Gauge proposal:\ * Highlighting incentive mechanics:\ *** #### :wheel: Pool Traction * V. Dramaliev highlighting rates:\ * Matthew Graham on market movement:\ *** #### 📢 External Pool & Other Announcementss * FX Protocol announcing Spectra pool:\ * LevelUSD on launching on Spectra:\ * Product addition by PWNDAO:\ *** #### 🔗 Internal Integration Highlights * Spectra highlighting integrations:\ \ * Spectra highlighting pool growth (major and impactful pools only)\ \ *** #### 🎓 Tutorials & Community Education * LevelUSD-specific tutorial by Nemi (after which their slvlUSD pool trading volumes ballooned!)\ *** #### 🧵 Standalone Spectra Pool Announcements - * New pool on Spectra:\ \ Reach out to the team, e.g., via support ticket, to discuss details. *** #### 🗣️ Community Engagement & Discussions * Ideas for public discussions on top of the existing content:\ \ \ These should spark multiple post ideas for X, giving the Spectra account and its contributors clear opportunities to engage and amplify. # Audits Below you will find all security reviews conducted on Spectra Protocol smart contracts, which are public-sourced. Note: All the issues reported by auditors have been addressed.
| Auditor(s) | Scope | Date | Report | Results Highlights | | --------------------------------- | ------------------------------------------------------------------------ | ---------------- | ----------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | | 42 security auditors of Code4rena | | March-April 2024 | |

0 High-risk findings
️2 Medium-risk findings
11 low risk/non-cricital findings

| | Pashov Audit Group | [spectra-core repository](https://github.com/perspectivefi/spectra-core) | March 2024 | |

0 High-risk findings
️3 Medium-risk findings
15 low risk/non-cricital findings

| | Sherlock |

perspectivefi/metavaults-V1

(private repository)

| September 2025 | Attachment Below |

0 High
2 Medium
9 Low/Info

All fixed.

| {% file src="/files/86kG0Xei1GcPYLHyH26M" %} {% file src="/files/aReEwor4Zy3k14xsXCr6" %} # Risk Documentation Spectra employs top-tier security measures. However, users should still be mindful of certain risks associated with using the Spectra Protocol & Flagship App. {% hint style="warning" %} By using the Spectra Protocol & Spectra App, you accept the associated risks. This section outlines various risk categories for using the Spectra Protocol & Spectra App. Please be aware that this list is not comprehensive and may not capture all possible risks you may encounter. {% endhint %} #### Smart Contract Risk There exists the inherent risk that the protocol's smart contracts might contain vulnerabilities or bugs, potentially leading to unforeseen issues. Several security measures are in place to mitigate this risk: * The Spectra code base is[ public-sourced](https://github.com/perspectivefi/spectra-core) * The code has been audited by the Pashov Audit Group and 42 security researchers of Code4rena who collectively reported 0 high-risk findings More details on Spectra's audits are [here.](/security/audits) #### AMM Risk Spectra is AMM-agnostic, meaning it uses external infrastructure providers to power its pools. Initially, Spectra leverages battle-tested [Curve ](https://curve.fi/)AMM. Curve has been [audited ](https://docs.curve.fi/references/audits/)numerous times since its inception in February 2020, however, a risk of vulnerability or a bug always exists. #### Counterparty risk Before supplying liquidity or obtaining yield derivatives, conducting due diligence on the projects that emit the underlying or the interest-bearing token is crucial. Spectra Protocol does not have control over the types of tokens that users decide to contribute to its pools. Therefore, it's essential to understand the source and stability of these tokens, as their inherent risks and performance are outside Spectra's oversight. #### Negative Yield risk It is possible that ERC-4626 interest-bearing tokens (IBTs) may experience a decrease in their underlying share value. In such cases, the underlying backing of Principal Tokens (PTs) will decrease proportionally to maintain the protocol's solvency. \ \ This is the inverse of the share value increasing, which would result in yield that Yield Token (YT) holders could claim. Negative yield events reduce the amount of underlying assets backing each PT, impacting the value PT holders can redeem at maturity. #### Interface risk Spectra's flagship app ([https://app.spectra.finance](http://app.spectra.finance/)) relays data from the Spectra Protocol and presents it in a humanly understandable way. Although it was built with best practices in mind, it is not immune to internal or external bugs caused, for example, by the user's browser extensions. If you think there's an issue with Spectra's App, please report it via Spectra's [official discord channel](https://discord.com/invite/GJhRf3r3UU). # SPECTRA SPECTRA is the ecosystem token of the Spectra protocol. {% hint style="info" %} On December 17, 2024, following [SIP3](https://snapshot.box/#/s:spectradao.eth/proposal/0x2d31f819ca389ab8e2801b9cb0f6d9f96c15939dc40114f1b6f22a7ef436255d), the SPECTRA token was [introduced](https://mirror.xyz/spectraprotocol.eth/Y1F_8IgrVGJnig_KxSEZmjFBGH6Im6LvRZCbeRpoV54), replacing APW as Spectra's ecosystem token. Find the migration guide [here](https://mirror.xyz/spectraprotocol.eth/SPADgYregHGvppLa4f14mfPw7PR1c0PAx66o3M_r__Q). {% endhint %} Ticker: $SPECTRA ### **Deployed Contracts** Base: \ Mainnet: \ Optimism: \ Arbitrum: ### **Token utility** The SPECTRA token inherits APW’s governance and utility characteristics. These include: * Vote on changes or improvements to the protocol * Ability to create a veSPECTRA Lock * Earn SPECTRA incentives for locking (as voted in SIP 0) * Gauge incentives participation The SPECTRA token follows the same emission curve as APW. Additional utilities may be added through the governance process. SPECTRA is now being tracked by: * [Coingecko](https://www.coingecko.com/en/coins/spectra-finance) * Coinmarketcap (work in progress) Liquidity Pools * [SPECTRA/cbETH on Aerodrome (Base)](https://aerodrome.finance/swap?from=0x64fcc3a02eeeba05ef701b7eed066c6ebd5d4e51\&to=0x2ae3f1ec7f1f5012cfeab0185bfc7aa3cf0dec22) * [SPECTRA/WETH on Uniswap (Base)](https://app.uniswap.org/explore/tokens/base/0x64fcc3a02eeeba05ef701b7eed066c6ebd5d4e51) ### **Emission Schedule** SPECTRA follows the same incentives emission schedule as APW. The formula for weekly emissions is the following: * `1754940 * 0.989^(27+i)` where `i` is the current weekly epoch (starting from 0, on Thursday 19 December 2024). * For example, during the 7 days from Thursday, January 23 2025 to Thursday, January 30 2025, `1754940 * 0.989^(27+5) = 1.231M` SPECTRA will be distributed. * • Emissions dynamically decrease over time, in line with the DAO-approved schedule per [SIP 0](https://snapshot.box/#/s:spectradao.eth/proposal/0x9e363814a3d2b08cfc744a0d3659d2feff0f4b5183b5532ba9fcf5326b00ff9d) Starting at the 105th week, incentives emissions will stabilize at an annual rate of 1.8% of SPECTRA total supply (assuming all APW is migrated). ### Token Supply API Endpoints The circulating and total supply of SPECTRA can be publicly accessed through these API endpoints: * Circulating Supply: * Total Supply: The methodology is the following: on all networks where SPECTRA is deployed, take the `totalSupply()` and sum all results. If you need the circulating supply, subtract balances of the Rewarder contracts and DAO treasury addresses (on all networks). ### Supply Facts * Absolute Max Supply: 876,751,272 * Circulating supply excludes locked tokens * Total supply includes circulating + locked tokens * DAO ecosystem reserve is not part of the circulating supply * Locking $SPECTRA earns revenues + a rebase, calculated as `veSPECTRA.totalSupply / SPECTRA.totalSupply)^3 * 0.5 * weekly emissions` Other Facts * The theoretical max supply assumes no votes to reduce emissions and that all tokens are locked (unlikely in practice = the remaining max emissions could be less than stated above) * Weekly emissions and the rebase mechanism allow for ongoing adjustments, effectively lowering the realized max supply. * SPECTRA Max Supply is not $1B, nor is it infinite. Its max ceiling under the current emissions schedule and tokenomics are 876,751,272 units. * Remaining APW to be migrated [Dashboard ](https://dune.com/ulydev/apw-migration/809598f4-910e-40b7-80f7-a78a24c0d960)tracker[
](https://x.com/GaspardPeduzzi/status/1883905073224540501) *** ### APW (Previous ecosystem token) The [APW token contract](https://etherscan.io/token/0x4104b135dbc9609fc1a9490e61369036497660c8) is immutable, meaning it cannot be paused, destroyed, or burned by any party. As such, the APW will continue to exist on the networks where it has been deployed. However, if liquidity diminishes or disappears over time, major token trackers and DeFi platforms may no longer display or update it. With Spectra governance contracts migrated to the Base Network and reliant solely on SPECTRA participation, the APW token lost its primary utility. The APW emissions ceased on Thursday, 19 December 2024, CET 02:00 AM. # veSPECTRA Locked veSPECTRA, where 've' stands for "vote-escrowed," allows holders to influence the parameters and evolution of the Spectra protocol through an on-chain voting process. **veSPECTRA** * Contract Address: [0x6a89228055C7C28430692E342F149f37462B478B](https://basescan.org/address/0x6a89228055C7C28430692E342F149f37462B478B) * Network: Base Network **Utility** The veSPECTRA is a transferable NFT, and inherits of the following ve(3,3) characteristics : * Entitlement to pools revenues (60% of the trading fees of the pools on which the holder has voted on) * Entitlement to the weekly rebasing = `(veSPECTRA.totalSupply() / SPECTRA.totalSupply() )^3 * 0.5 * weekly emissions` * Voting on Spectra Governance proposals * A 4-year ve(3,3) locker model Following the successful ve(3,3) lockers model of Aerodome/Velodrome, veSPECTRA holders can earn protocol revenues and third-party incentives in exchange for help directing SPECTRA emissions to pools. **How to obtain veSPECTRA?** veSPECTRA can be obtained by locking SPECTRA from 1 week to up to 4 years via Spectra's [App](https://app.spectra.finance/governance). SPECTRA holders can create multiple locks, allowing for more efficient governance participation. ## Rewards Boost By locking SPECTRA in the Voting Escrow contract (veSPECTRA), you can boost your rewards. The boost mechanism allows you to enhance the rewards you earn based on the amount of veSPECTRA you hold. * **Minimum Boost:** Achieved when you have no veSPECTRA. * **Maximum Boost:** Achieved when you have locked enough veSPECTRA. See below for details on [how to get the maximum boost](#how-to-obtain-the-maximum-boost). ### When Is the Boost Applied? The boost is applied automatically—there’s nothing you need to do manually. * **Liquidity Movements:** Each time liquidity is added or removed from a pool, we snapshot the balance of veSPECTRA for all Liquidity Providers. * **Boost Duration:** The boost remains the same until a new liquidity event occurs in the pool. ### How Is the Boost Calculated? The boost mechanism calculates the earning weight of the liquidity you provide to pools. If you have sufficient voting weight (veSPECTRA), you can boost the earning weight of your liquidity by up to **2.5x**. **Example:**\ If you have a boost of 2.5x and deposit $10,000 of value into a pool, your rewards will be calculated as if you have $25,000 of value in the pool. #### Boost Calculation Formula $$ B = \min\left(2.5, \ 1.5 \times \frac{v}{V} \times \frac{D}{d}\right) + 1 $$ with: * $$B$$ : the rewards boost (between 1 and 2.5). * $$d$$ : The value of your deposit in the pool (in USD). * $$D$$: The total value deposited in the pool (in USD). * $$v$$: The amount of veSPECTRA you hold (vote weight). * $$V$$: The total veSPECTRA in the system (total vote weight). ### How to Obtain the Maximum Boost To achieve the **maximum boost of 2.5x**, your share of veSPECTRA voting power must be **at least equal** to your share of LP tokens in the pool. * **Example:** * If you own **30%** of the LP tokens in a pool, you need to hold at least **30%** of the total supply of veSPECTRA. * This means your veSPECTRA balance should be **30%** of the total supply of veSPECTRA . #### In Other Words Your veSPECTRA holdings should be **proportional** to your **liquidity share** in the pool to maximize your boost. # Fees **Pool Swap Fees** Spectra collects a swap fee from all swaps on the IBT/PT pools. The collected fee is distributed the following way: * 60% to veSPECTRA voters * 20% to LPs * 20% to Curve DAO. The fees for veSPECTRA voters and Curve DAO will be swapped to ETH for easier distribution. **Yield Fees** Spectra takes a 3% fee on all yield accrued by YT, including points. Points are considered to be yield, and protocols integrated on Spectra should deduct the 3% fee when distributing points to user wallets. The deducted points are re-allocated to the following address: Spectra DAO (Multichain): 0xe59d75C87ED608E4f5F22c9f9AFFb7b6fd02cc7C This fee is being collected by the Spectra DAO treasury for later redistribution. # Fixed Rates With the Fixed Rates tool, you can lock in APY for a specific period. {% hint style="info" %} You may encounter various verbs that describe this action, such as *fixing, locking in, or securing APY.* {% endhint %} Here, you can convert your crypto, such as USDT, into Principal Tokens (PT), which encapsulate a fixed yield until the end of the period, marked as Maturity.
The upper section displays essential details of the pool used for the exchange, covering the interest-bearing token and its associated Principal Token (PT), the PT's maturity date, and the pool's liquidity {% hint style="info" %} At maturity, Principal Tokens are redeemable 1:1 with the underlying token. {% endhint %} The details of the outcome of the PT purchase are displayed at the bottom of the Fixed Rates drawer. \ \ In this scenario, for a 100 USDT input, we are presented with a 106.86 PT-sUSDT output, meaning that at maturity, we'll be able to redeem PTs for Underlying in a 1:1 ratio, resulting in a net profit of 6.86 USDT.
Let's break down the details of the output area: * **Output:** The number of PT units we receive for our input * **Min. Output:** You will not receive less than the displayed number of PT units for your input. It considers slippage. * **Fixed APY:** The APY you will earn by holding onto the Principal Tokens until maturity. * **Fee:** The swap fee is already reflected in the **`Output`** * **Fixed Maturity Profit:** Net profit expressed in the underlying token and its current USD value {% hint style="info" %} The $USD value of the `Fixed Maturity Profit` label is for informative purposes only. When fixing rates on non-stablecoin assets, they are subject to USD market fluctuations. {% endhint %} #### **Questions?** [View this FAQ section on Principal Tokens](/the-basics/faq#principal-token-pt) # Trade Yield Buy and sell Yield Tokens to grain or reduce exposure to APY volatility and yield accrual. Here, you can convert your crypto, such as USDT, into Yield Tokens (YT), which encapsulate the right to the future yield of the corresponding interest-bearing token.
In the top area, you will find the essential details of the pool used for the exchange, including the YT's expiry date and current liquidity. The tabs below, Buy / Sell, change the intent of the desired action. A YT purchase can be made by providing an underlying or interest-bearing token.
The bottom part of the drawer provides the following output details: * The number of YT units received alongside their current USD market value * Min Output - you will not receive less than the displayed amount of YT * Notional Value Traded—Under the hood, when buying/selling one YT, one PT has to be bought/sold. The notional value encapsulates the total USD value of assets traded to execute the swap. * Implied APY - Current market prediction of an asset's future yield. * Fee - considers Notional Value Traded To initiate the swap, token approval \[Approve] is required, followed by a swap confirmation \[Buy YT] or \[Sell YT]. #### **Questions?** [View this FAQ section on Yield Tokens.](/the-basics/faq#yield-token-yt) # Create Pool This guide will assist you in navigating the 'Create New Pool' module. Creating a pool on Spectra is completely permissionless. In the top section of the module, you are presented with 3 areas for key ingredients required to create a pool - an interest-bearing token, Target APY, and maturity date.
**The first input** \[Select iBT] allows you to select a compatible interest-bearing token (iBT) from your wallet, which will serve as the pool's initial liquidity.

The token selector list shows compatible tokens in your wallet and a few pre-defined popular tokens to give you a sense of other compatible tokens. For a comprehensive list of ERC4626 tokens, refer to https://tvl.erc4626.info/

The second area requires you to define the pool's maturity. Choose from preset periods of 3, 6, or 12 months, or specify a custom date using the handy calendar feature. It can range from as little as 2 days to up to 4 years.
{% hint style="info" %} The starting date is pre-defined and cannot be altered. {% endhint %} The third area requires pool creators to enter the Target APY. It is an estimate of the average annual percentage yield the pool aims to achieve over its lifespan.\ \ To determine the target APY, the pool creator can utilize the native interest-bearing token (iBT) platform to check its current and historical APYs. Cross-referencing this data with reliable DeFi yield trackers, such as DefiLlama, provides a comprehensive view. Below is an example of completed input fields.
Here's what the output area displays in our case:
The pool creator receives an LP token composed of iBT and Principal Token. Yield Tokens also result from the yield tokenization process; however, they are not a part of the pool composition. \ \ After a successful pool creation, LP and YT tokens are displayed in Portfolio under their respective tabs. {% hint style="info" %} LP token holders remain entitled to fees from Yield Token (YT) swaps as they are driven by flash swaps utilizing the PT<>iBT pool. {% endhint %} ### **Questions?** [View this FAQ section on pool creation.](/the-basics/faq#pool-creation) # Add Liquidity This guide will assist you in navigating the 'Add Liquidity' module. After selecting the pool where you want to provide liquidity, you'll see the following:
In the upper section of the module, you will find the essential info: * Pool identifier alongside the pool's address * The pool's expiry date * Current liquidity expressed in $USD You can choose an underlying token (e.g., USDT) or its Interest-Bearing Token (e.g., aUSDT) in the input field to get started with liquidity provision. Underneath, the NPIM mode allows you to enter the pool in two ways: NPIM ON: The output consists of an LP (PT<>iBT) and YT token. In most cases, this will result in slightly fewer LP tokens than the NPIM OFF way. {% hint style="info" %} Yield Tokens result from the yield tokenization process; however, they are not part of the pool composition. \ \ LP token holders remain entitled to fees from Yield Token (YT) swaps as they are driven by flash swaps utilizing the PT<>iBT pool.\ \ Read more about output composition when providing liquidity [in this FAQ section.](/the-basics/faq#pool-creation) {% endhint %} NPIM OFF: The output consists solely of an LP Token. {% hint style="info" %} In this scenario, Principal Tokens in the LP token are directly bought from the IBT parts in the pool. {% endhint %} Upon entering the deposit amount (in our example, that's 100 USDT) with NPIM OFF, the lower area provides an output summary consisting solely of:
* **LP Tokens** - represent the number of liquidity provider (LP) tokens you receive in exchange for your deposit. These tokens are proof of your share in the pool and can be used to redeem your portion of the pool's assets, plus any accrued swap fees. * **Pool Share** - represents the percentage of the total pool's liquidity that your deposit contributes. This percentage determines your proportionate share of any swap fees the pool generates. To proceed, token approval \[Approve] is required first, followed by action confirmation \[Add Liquidity]. #### **Questions?** [View this FAQ section on adding liquidity. ](/the-basics/faq#liquidity-provision-addition) # Remove Liquidity This guide will assist you in navigating the 'Remove Liquidity' module. After selecting the pool from which you want to remove liquidity, you'll see the following: {% hint style="info" %} This module also can be accessed via Portfolio -> Liquidity tab -> LP position -> \[Manage] -> Add/Remove Liquidity {% endhint %}
In the upper section of the module, you will find the essential info: * Pool identifier alongside the pool's address * The pool's expiry date * Current liquidity expressed in $USD Under the \[Remove] tab, you will also see the following: * Your LP token balance * Pre-defined buttons and custom field that help you determine the amount of LP tokens to withdraw * NPIM (No price impact mode):\ \- ON: The output comprises an interest-bearing token and its corresponding Principal Token. \ \- OFF: The output is composed only of an interest-bearing token. {% hint style="info" %} Read more about the output area when withdrawing liquidity [in this FAQ section.](/the-basics/faq#liquidity-provision-removal) {% endhint %} In this case, we withdraw 50% of the LP balance with NPIM mode OFF.
The output area summarizes the number of interest-bearing tokens we'll receive and informs us about the reduction of our Pool Share. To proceed, token approval \[Approve] is required first, followed by action confirmation \[Remove Liquidity]. #### **Questions?** [View this FAQ section on removing liquidity. ](/the-basics/faq#liquidity-provision-removal) # Claim Accrued Yield This guide will assist you in navigating the 'Claim Accrued Yield' module. Users holding Yield Tokens with any amount of claimable yield can access this module. Accrued yield can be claimed anytime, before and after the YT's expiry date. Below is a simple example of a YT position with accrued and claimable yield.
In this case, since no yield has ever been claimed on YT, the Total Accrued Yield and Claimable Yield display the same values. Users can only fully claim the number of units displayed under Claimable Yield. The dropdown selector allows changing the output from the default Underlying to an interest-bearing token, depending on individual needs.\ \ To proceed, simply click the \[Claim Yield] button.
{% hint style="info" %} Shortly after claiming yield, this drawer will no longer be accessible on the UI until any amount of the new yield accrues to YT's position. {% endhint %} **FAQ:** 1. **Can I claim my accrued yield anytime?** Yes, you can claim the `Claimable Yield` at any time before or after YT's expiry date. 2. **What happens if I claim my accrued yield before Yield Token's expiry?** Yield Tokens remain in your Portfolio and will continue to capture yield until their expiry. You can reclaim the newly accrued yield to your wallet at any time. 4. **What happens after Yield Token's expiry?** After YT's expiry, the amount of Accrued Yield no longer updates, and you can only claim the remaining `Claimable Yield` in full to your wallet. # Sell Principal Tokens This guide will assist you in navigating the 'Sell Principal Tokens' module. This module lets you sell Principal Tokens (PTs) before maturity. \ \ You can find it by navigating to Portfolio, under the PT tab, locating your PT position, and clicking on the \[Manage] button. A drop-down menu will appear—simply select the \[Sell PT] option to open the following module.
The module's top area provides information about the PT's pool pair, the associated pool contract, the PT's maturity date, and the available liquidity in USD terms. Following this, an input field displays the PT balance in your wallet. After entering the number of Principal Tokens you wish to swap for underlying, navigate to the output area below:
The output area informs you about the number of underlying tokens (in this case, USDT) you will receive for your PTs alongside their current USD market value. The `Min Output` informs that you will not receive less than the displayed amount of Underlying after initiating the Sell PT transaction. To proceed, token approval \[Approve] is required first, followed by action confirmation \[Sell PT]. ### Frequently Asked Questions 1. **What is the benefit of selling Principal Tokens before maturity?** If you don't want to wait any longer for your Principal Tokens to reach maturity, you can sell them back to the pool for immediate underlying tokens. The number of Underlying tokens you will receive depends on factors such as time left to maturity and available liquidity. 2. **Why am I not receiving an equal amount of underlying for my Principal Tokens?** To obtain an equal amount of underlying for every PT token, it is required to wait until PT's maturity date. 3. **Can I sell a portion of my Principal Tokens, or must I sell all at once?** Yes, you can sell a portion of your PT holdings anytime. 4. **Why does it say, 'You will receive at least'?** The summary provides the estimated outcome based on the current liquidity and factors in all the fees. If the pool's liquidity shrinks after initiating the transaction (e.g., someone sells a large PT position right before you), the transaction will not settle for less than what is displayed in the `Min Output`. 6. **What happens after selling my PTs?** After selling your Principal Tokens, you will receive the underlying token (e.g. USDT) directly into your wallet. # Brand Materials {% file src="/files/lbLc3OWztwZqzJOlcRzi" %} {% file src="/files/MvIX4fOsWBTssYlHLxsi" %} {% file src="/files/12KnYYS0AgGVuDlnlxnD" %} {% file src="/files/YCDSuNc5JRLg5XMwP5P3" %} {% file src="/files/k0iWRYIN6lMGZqPx9x4T" %}