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Spectra has launched on Flare, introducing yield tokenization that lets users split interest-bearing assets into tradeable components. The protocol separates a token’s principal and future yield, enabling new ways to lock in returns, trade yield exposure, and build composable DeFi products on Flare.
How Spectra works
Spectra mints two token types from yield-bearing assets (for example, sFLR). Principal Tokens (PTs) represent the principal and are structured to reach face value at maturity, allowing holders to secure a predictable, fixed outcome. Yield Tokens (YTs) represent the right to future yield and can be traded independently, enabling speculation on or hedging against changes in yield rates.
By making yield itself tradable and composable, Spectra supports strategies like fixed-rate income, leveraged yield exposure, and use of PTs/YTs as building blocks for structured products or collateral in lending markets. This increases capital efficiency by letting the same asset power multiple protocols and could attract more sophisticated and institutional activity to Flare.
Who is it for?
Anyone can create yield-trading markets on Spectra and earn swap fees in a model similar to automated market makers. The protocol serves advanced DeFi users and institutions seeking precise control over on-chain returns, while also offering accessible tools for broader users. Spectra’s Fixed Rate tool allows users to obtain PTs and lock in a known outcome (for example, pay 1 now to receive ~1.1 later), providing a straightforward entry point to yield tokenization.
Initial pools and liquidity
At launch, Spectra supports a liquidity pool for sFLR, facilitating both fixed-rate markets (PTs) and yield-leverage markets (YTs). Liquidity providers earn trading fees and may receive additional incentives such as rFLR or SPECTRA. Expansion of pools is a priority, with Firelight’s stXRP expected to be added next to broaden available markets.
Users can hold PTs for fixed returns, trade YTs to adjust yield exposure, or supply liquidity to capture fees and rewards. Spectra’s arrival on Flare adds a foundational financial primitive—yield tokenization—that enhances the ecosystem’s toolkit for developers and liquidity providers, and strengthens the network’s potential for composability, capital efficiency, and long-term growth.
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