- At its core, Spectra protocol splits any yield-bearing tokens on Flare into two parts that can be used independently:
Spectra, a pioneering yield trading platform, is now live on Flare. It introduces a new way for users to buy, sell, and manage yield from interest-bearing assets. By separating the fixed and variable parts of yield, Spectra gives users greater control over how they earn, trade, and manage returns on Flare.
How does Spectra work?
At its core, Spectra protocol splits any yield-bearing tokens (e.g. sFLR) on Flare into two parts that can be used independently:
- Principal Tokens (PTs) represent the principal value of the underlying asset and are designed to reach their full face value at maturity. Holding PTs allows users to lock in a predictable, fixed return.
- Yield Tokens (YTs) represent the right to future yield that the asset will generate. YTs can be traded independently, giving users a way to speculate on or hedge against changes in yield rates.
By making yield itself composable and tradable, Spectra opens the door to more advanced and flexible DeFi strategies. Users can lock in steady income, take on leveraged yield exposure, or use these tokens as building blocks for new products in the Flare ecosystem. In the future, for instance, PTs could be used as collateral in modular lending protocols such as Mystic or Morpho, creating even more DeFi use cases on Flare.
Why does it matter for Flare?
Spectra introduces a core financial primitive to the Flare ecosystem — yield tokenization — which marks a major step toward a more mature, interconnected onchain economy. Not only does this broaden the toolkit available to developers and liquidity providers, but it also strengthens the foundation for long-term ecosystem growth and institutional adoption. How?
- Fixed-rate, variable-rate, and structured products can now be built natively on Flare.
- PTs and YTs offer composability that standalone, interest-bearing tokens cannot.
- Both beginners and advanced users benefit from predictable fixed rates or leveraged yield markets.
- Enabling a new asset class to be reused across multiple protocols strengthens capital efficiency by forming a more interconnected, productive on-chain economy.
- A foundation for future innovations in lending, collateral design, stablecoin systems, and other advanced DeFi primitives
Spectra adds a missing layer of financial infrastructure, one that strengthens Flare’s long-term ecosystem growth and supports institutional adoption..
Who is it for?
Spectra is a permissionless yield-derivatives protocol where anyone can launch their own yield-trading market for assets such as sFLR or FAssets and earn fees on swaps in a model similar to Uniswap.
While this flexibility attracts advanced DeFi users and institutions seeking greater control over on-chain returns, Spectra is equally approachable for newcomers and the broader Flare community.
The easiest place to start is the Fixed Rate tool in the Spectra app. Here, anyone can obtain PTs and lock in a known, predictable outcome, for example: pay 1 today, receive ~1.1 in X days. It’s a simple way for users to “get their feet wet” with yield while still leaving room to explore more advanced strategies over time.
What are the details of the initial pools and liquidity?
At launch, Spectra will host a liquidity pool for Flare’s native liquid staked token, sFLR. The pool will form the foundation for both of the protocol’s core products – fixed rate (where PTs are minted and traded) and yield leverage (where YTs are minted and traded). Liquidity providers supply a balanced position that supports both sides of the market. In return, LPs:
- Earn swap fees from PT and YT trading
- May receive additional rewards such as rFLR or SPECTRA
During the first weeks, the primary focus will be to deepen liquidity across Spectra’s pools on Flare. As liquidity grows, PT and YT swaps become more efficient and cost-effective for all users.
Following sFLR, Firelight’s stXRP is expected next, expanding the range of markets available to users and developers.
How can users participate today?
Spectra is live now on Flare. There are several ways to participate, depending on a user’s goals and level of experience.
- Lock in returns: Hold Principal Tokens (PTs) to earn predictable, fixed income.
- Trade yield: Buy or sell Yield Tokens (YTs) to adjust exposure to variable returns.
- Provide liquidity: Contribute to Spectra pools and earn trading fees and potential extra rewards.
Start exploring Spectra today at https://spectra.finance and experience the next stage of Flare DeFi.