Introduction

The DeFi yield market is growing at an astonishing pace, becoming one of the most dynamic and innovative sectors in the blockchain space. In 2024, the scale of the DeFi yield market expanded significantly, drawing considerable attention from capital and users alike. At its core, this market aims to provide users with more flexible and efficient yield-generating methods while promoting the further development of the decentralized financial ecosystem. With the expansion of the stablecoin market and the increase in tokenized assets, the DeFi yield market is gradually becoming a focal point for both investors and developers.

Within this rapidly developing market, Pendle and Spectra have emerged as two major players, each adopting different strategies to drive growth in the yield sector. Pendle has taken the lead in the yield derivatives space through its innovative mechanisms, such as yield token splitting (PT and YT) and the vePENDLE model. On the other hand, Spectra has adopted a phased rollout strategy, focusing on the integration of stablecoins and real yield assets, and has achieved rapid growth through deep integration with projects like USR.

This article aims to explore in depth Spectra’s strategies in the DeFi yield market, analyze its impact on the industry, and forecast future development trends. By comparing the growth models and market performance of Pendle and Spectra, we can gain a clearer understanding of the innovation paths and potential opportunities within the DeFi yield market.

What is Spectra?

Spectra (formerly known as APWine Finance) is a DeFi project focused on optimizing yield from stablecoins and ETH. It aims to provide users with more flexible yield strategies and risk management tools through a permissionless interest rate derivatives (IRD) market. Through its innovative yield tokenization mechanism, the project allows users to split yield-bearing tokens (such as aUSDC) into principal tokens (PT) and yield tokens (YT), enabling them to lock in stable, fixed-rate returns. Users can leverage these tokens for yield farming or to trade yields over specific time periods, thereby achieving higher capital efficiency.

Spectra has chosen the Base network as its primary deployment platform to lower user entry barriers and improve liquidity. Base’s low transaction fees and high throughput enable Spectra to offer a diverse array of yield opportunities while maintaining low usage costs. Additionally, Spectra is developing a feature called MetaVaults, an innovative yield aggregation tool aimed at optimizing capital efficiency and simplifying user interaction to deliver more efficient yield strategies.

Spectra has also formed close partnerships with leading projects like Curve Finance, further strengthening its competitive edge in the DeFi ecosystem through deep integration with real yield assets such as USR. With these strategic initiatives, Spectra has not only achieved rapid growth in the yield market but also provided users with broader yield options, driving further advancement of the decentralized finance ecosystem.

Source: https://docs.spectra.finance/the-basics/what-is-yield

Project Background

Team Members

The Spectra team consists of professionals with rich experience in DeFi, blockchain, and decentralized technologies. Core team members include:

• Jean Chambras｜Co-founder
  Jean Chambras is the co-founder of Perspective.fi and Spectra Finance. He graduated from EPFL and ETH Zurich.

• Ulysse R.｜Co-founder
  Ulysse R. is a co-founder of Spectra and previously worked at Amazon. He graduated from EPFL.

• Gaspard Peduzzi｜Co-founder
  Gaspard Peduzzi is a co-founder of Spectra and also the co-founder and president of the Blockchain Student Association.

In addition, many team members come from top tech companies and research institutions, bringing deep expertise and extensive practical experience in their respective fields.

Funding Status

Spectra’s funding projects include:

• As of April 10, 2025, Spectra has raised approximately $8.7 million in total funding.
• Its investors include Greenfield, Spartan Group, and Delphi Digital.

Core Features of Spectra

As a DeFi project focused on optimizing yields from stablecoins and ETH, Spectra’s core goal is to provide a flexible and efficient yield strategy platform through an innovative yield tokenization mechanism and a permissionless interest rate derivatives market. By allowing users to split yield-bearing tokens into principal tokens (PT) and yield tokens (YT), it not only helps them lock in fixed-rate returns but also provides flexibility for leveraging and trading yields. Deployed on the Base network, Spectra further reduces entry barriers and enhances liquidity. These functionalities are powered by key technical features including permissionless pool creation, fixed-rate locking, yield leverage and trading, Base-first strategy, and the in-development MetaVaults feature. These features form the foundation of Spectra’s competitive edge in the DeFi yield market.

Source: https://docs.recall.network/intro

Permissionless Pool Creation

Spectra allows anyone to create interest rate derivatives markets based on the ERC-4626 standard without undergoing complex governance processes. This gives users greater flexibility and freedom to create and manage their own IRD markets. With a user-friendly interface, users can easily launch a new IRD market by selecting a compatible yield token (e.g., aUSDC), setting parameters such as maturity date, expected APY volatility, and initial PT discount—often in just a few clicks. This approach broadens access to yield speculation and fixed-rate strategies, enabling anyone with an internet connection to create pools and provide liquidity.

Source: https://app.spectra.finance/pools

Fixed-Rate Locking

Users can split yield-bearing tokens into PT and YT to lock in fixed-rate returns. This mechanism offers clear yield expectations and reduces the risks brought by market volatility. Much like buying a zero-coupon bond, users can establish a fixed-income position by allocating principal, selecting a maturity date, and knowing their expected redemption value. Real-time rate data and visual tools support decision-making, removing the need for expertise in derivative pricing models.

Source: https://app.spectra.finance/fixed-rate

Yield Leverage and Trading

Through yield tokenization, users can easily set up leveraged yield positions or trade yield for specific time frames. This increases yield flexibility, enabling users to tailor operations to their investment strategies and risk preferences. The complex process of yield tokenization is distilled into intuitive steps, empowering users to perform yield leverage and trading with ease. Real-time rate data and visual aids help users manage their portfolios effectively.

Spectra Project Updates

Partnership with Curve Finance

Spectra plans to expand its synergy with Curve Finance to strengthen its position in the DeFi ecosystem. Curve is a decentralized lending and exchange protocol known for its efficient and secure stablecoin swaps. The collaboration focuses on optimizing Spectra’s pools using Curve’s automated market maker (AMM) technology.

This partnership addresses liquidity and trading inefficiencies present in earlier versions. It significantly enhances Spectra pool liquidity and trading performance, thereby improving user experience and driving broader product adoption. As liquidity increases, LPs (liquidity providers) can earn higher returns, creating a positive feedback loop that fosters protocol growth.

MetaVaults Feature

Spectra is developing an innovative yield aggregator called MetaVaults, designed to optimize capital efficiency and simplify user interactions, offering more effective yield strategies. MetaVaults automates liquidity rolling and maximizes yield, cementing Spectra’s position as a pioneer in IRD technology and ecosystem development. It tackles key challenges in current liquidity models, such as fragmentation and manual fund redistribution.

• User Deposits: Users deposit funds into MetaVaults, which are automatically distributed to curated Smart Vaults, each optimized for specific assets and strategies.
• Automated Management: Smart contracts handle reinvestment and yield compounding based on predefined allocation ratios and strategies.
• Yield Maximization: By dynamically adjusting allocations, MetaVaults captures the best yield opportunities.
• Withdrawals: Users can withdraw funds at any time, and MetaVaults handles redemptions automatically.

Source: https://x.com/jean_chambras/status/1866438617146561014

Token Migration

On December 2, 2024, Spectra announced the migration of its APW token to SPECTRA to align with a new tokenomics framework. This transition reflects the protocol’s evolution and aims to support mechanisms like bribes and protocol fees more effectively.

• Technical Debt and Immutability: The APW token carried legacy technical debt from the APWine era. As Spectra transitions to a permissionless decentralized financial primitive, the tokenomics must evolve in sync with the protocol.
• Unified Governance and Liquidity Strategy: The migration aligns governance, liquidity, and branding under one identity, positioning SPECTRA as the foundation for ongoing growth.
• Migration Details: The migration follows a 1:20 ratio (APW:SPECTRA). SPECTRA inherits many governance and utility features from APW, with updated parameters and an increased supply cap of 876,751,272 tokens. While APW remains on-chain (immutable contract), its issuance has ended, and it no longer plays an active governance role. Post-migration, SPECTRA holders gain governance rights and may lock tokens as veSPECTRA to enhance rewards or participate in weekly Gauge votes.
• veSPECTRA Tokenomics: veSPECTRA inherits veAPW features, including rights to 3% of YT-generated revenue and emissions, and the ability to vote on Spectra proposals. veSPECTRA follows SIP3 features and a 4-year ve(3,3) locker model, similar to veAERO/veVELO. veSPECTRA receives 80% of protocol revenue and third-party incentives in return for directing SPECTRA emissions toward pools.

As of April 12, 2025, a total of 171 million SPECTRA tokens were staked (~$3.3 million), with a total staking rate of 33.70%.

Source: https://app.spectra.finance/governance

Comparative Analysis of Pendle and Spectra

Spectra’s recent developments, including its partnership with Curve Finance, the launch of MetaVaults, and token migration, showcase its rapid ascent and innovative edge in the DeFi yield market. These initiatives have significantly boosted Spectra’s market competitiveness while offering users more efficient and diversified yield strategies. Meanwhile, Pendle, a pioneer in the yield derivatives space, has also rapidly established its leadership… (Text appears to be cut off here.)

Pendle’s Growth Strategy

• Early Advantage:
  Pendle achieved rapid growth through its integration with liquid staking derivatives (such as wstETH). This strategy enabled Pendle to quickly attract users and liquidity, laying the foundation for further platform development. Pendle’s early success stemmed from its innovation in fixed income products and the strong market demand for yield trading instruments. In 2024, Pendle’s TVL grew from $230 million to $4.4 billion, over a 20-fold increase, becoming a significant player in the DeFi space.

• Core Mechanism:
  Pendle’s yield token splitting (PT and YT) is its core mechanism. Users can split yield-generating assets into Principal Tokens (PT) and Yield Tokens (YT). PT represents the principal portion of the asset, while YT represents the future yield portion. This splitting mechanism allows users to speculate on these two parts separately, enabling fixed returns or capturing short-term market opportunities. For example, users can buy PT to lock in a fixed rate or buy YT to bet that future yields will exceed the current APY. This innovation fills the market gap for time-value trading, giving Pendle a unique advantage when integrating with traditional financial products.

• Flywheel Effect:
  Pendle’s “Morpho Loop” strategy creates a positive feedback loop by optimizing capital efficiency in lending protocols. Morpho resolves the issue of mismatched fund lending in traditional protocols through a peer-to-peer matching mechanism, thereby improving the efficiency of capital use. This strategy not only attracted more liquidity providers (LPs) but also increased platform trading volume and user engagement, further driving Pendle’s TVL growth.

Spectra’s Strategic Moves

• The Rise of USRL:
  Spectra achieved rapid TVL growth through deep integration with USR. Spectra formed a close partnership with Curve Finance, enhancing its competitiveness in the DeFi ecosystem by deeply integrating USR and other yield-generating assets. This collaboration improved liquidity and trading efficiency in Spectra pools, while also attracting more users and liquidity providers, forming a positive feedback loop

Source: https://defillama.com/protocol/spectra

• Incentive Mechanism:
  Spectra’s incentive pool design attracts more users and liquidity providers by offering additional yield incentives. The incentive mechanism includes token rewards and liquidity mining programs, encouraging users to participate in the platform’s yield strategies. For example, Spectra’s STIP program, which allocates a large amount of token incentives, significantly boosted platform liquidity and trading volume. This incentive mechanism not only increased user participation but also strengthened users’ trust and reliance on the platform.

• Community Support:
  Spectra enhances user confidence in the platform through active community interaction and user education. Community support includes regular project updates, quick responses to user feedback, and community-driven governance mechanisms. These measures not only increased user engagement but also helped establish a strong community foundation, providing support for the platform’s long-term development.

The differentiation strategy of Pendle and Spectra

Pendle’s early positioning in the yield derivatives market gave it a significant first-mover advantage. Through innovative yield tokenization mechanisms and extensive market partnerships, Pendle quickly established its leadership in the DeFi yield market. Pendle’s early success benefited from its integration with liquid staking derivatives (such as wstETH) and its vePENDLE model, which directed token issuance to high-demand pools, encouraging deep liquidity. This strategy not only attracted a large number of users and liquidity but also accumulated rich market experience and expertise, enabling it to maintain a competitive edge.

Spectra achieved rapid catch-up through its phased rollout strategy and deep integration with USR. In 2024, Spectra significantly improved its market competitiveness through its partnership with Curve Finance and the introduction of MetaVaults. Spectra’s phased rollout strategy allowed it to gradually optimize product functions and user experience, while deep integration with USR attracted large volumes of users and liquidity, resulting in rapid TVL growth. Spectra’s TVL increased from $20 million in December 2024 to over $190 million, mainly driven by the rapid rise of Resolv Labs’ USR, which triggered a surge in demand for fixed yield options.

Risk Analysis

In this comparative analysis of Pendle and Spectra, we explored the unique positioning and development paths of both in the yield market. Pendle, with its early layout and innovative yield tokenization mechanisms, quickly established its market leadership. At the same time, Spectra, through deep integration with USR and its phased rollout strategy, managed to catch up quickly. However, despite both exhibiting strong growth momentum in the market, they face their own risks and challenges. We will now conduct a comprehensive analysis of Spectra’s risks to assess its potential and limitations in the DeFi yield market.

Technical Risks

• Smart Contract Vulnerabilities:
  Although Spectra’s contracts have been audited and reviewed by the community, there remains the risk of undetected vulnerabilities or attacks. For example, in July 2024, Spectra was attacked, resulting in a loss of approximately $550,000. Additionally, Spectra’s front-end interface may contain vulnerabilities or inaccurate content, requiring users to verify information from multiple sources.

• External Dependency Risks:
  Spectra depends on external AMMs (such as Curve). While Curve has been well-audited and widely trusted, unpredictable issues or vulnerabilities may still arise.

• Counterparty and Base Token Risks:
  Yield is dependent on the performance and stability of the underlying IBTs. If the issuing protocols experience instability or other challenges, the principal redemption value and yields may be adversely affected.

Token Risks

• Changes in Token Economics Framework:
  Spectra’s token economics framework changes could introduce uncertainty. On December 2, 2024, Spectra announced that the APW token would be migrated to SPECTRA to adapt to the new token economic framework. This change could affect the market performance of the token and users’ holdings.

• Market Volatility:

The price of the SPECTRA token may be influenced by factors such as market competition and project development, creating volatility risks. The current price is approximately $0.021.

• Dilution Risk:
  Spectra’s market cap to fully diluted market cap (FDV) ratio is high, indicating significant dilution risks. If token unlocks exceed demand, this imbalance could suppress price growth.

Source: https://www.coingecko.com/en/coins/spectra-finance

Regulatory Risks

As a DeFi project, Spectra may be affected by the EU MiCA regulatory framework. Under Article 45 of MiCA, which relates to smart contract audits, Spectra must ensure that its smart contracts comply with MiCA’s transparency, security, and consumer protection rules. Spectra has taken measures in areas such as smart contract audits, transparency, and information disclosure to ensure compliance.

• Smart Contract Audits:
  Spectra has undergone multiple audits of its smart contracts to ensure code security and reliability. The auditing process includes static analysis, dynamic analysis, and threat modeling to identify potential vulnerabilities and risks.

• Transparency and Information Disclosure:
  Spectra plans to provide detailed whitepapers and audit reports to meet MiCA’s information disclosure requirements. This will help users and regulators better understand the operation mechanisms and security of its smart contracts.

• Consumer Protection:
  Spectra will implement measures to protect users’ interests, including establishing comprehensive customer complaint procedures and ensuring the secure custody of user funds.

• Stablecoin Compliance:
  If Spectra involves yield derivatives tied to stablecoins, it must ensure that the underlying assets comply with MiCA regulations to avoid legal risks.

Through these measures, Spectra is actively undergoing compliance reform to meet MiCA’s stringent requirements. This not only helps reduce potential legal risks but also enhances trust and participation from investors and users.

Spectra may also face regulatory scrutiny from the U.S. SEC. The SEC has adopted a stricter regulatory stance toward cryptocurrencies and DeFi projects, including registration requirements, information disclosure, and increased compliance costs. If the SPECTRA token is classified as a security, it may need to register or seek an exemption, which could affect the project’s token sales and market performance. Additionally, the SEC requires cryptocurrency projects to provide high levels of transparency, including details about the project team, token distribution, and usage. Spectra will need to ensure that its operations and token economics comply with these requirements to avoid potential legal disputes.

Spectra’s decentralized and borderless nature makes it difficult to comply with regulatory requirements, and regulatory uncertainty could lead to regulatory scrutiny and enforcement actions, impacting the project’s viability and growth. Moreover, regulatory uncertainty may deter institutional investors and users from participating in the DeFi ecosystem, as the lack of regulatory clarity and potential legal risks may discourage them, which poses a challenge for Spectra in attracting capital and users, hindering its scaling and innovative development.

Future Outlook

Spectra, by continuously optimizing its technology, expanding its market presence, ensuring compliance, and launching innovative products, is expected to achieve sustainable development in the highly competitive DeFi ecosystem, offering users more efficient and reliable yield solutions.

Spectra will continue to optimize its core technology, including permissionless pool creation, fixed-rate locking, yield leverage, and trading, among other features. With continuous improvement in these technologies, Spectra aims to provide users with more efficient and flexible yield strategies. In addition, Spectra will also focus on enhancing the stability and security of the system, ensuring the safety of user funds.

Spectra plans to expand its influence in the DeFi ecosystem by collaborating with more DeFi projects and protocols, creating mutually beneficial partnerships. Spectra will also actively explore new market opportunities, such as integration with other blockchain networks, to attract more users and capital.

In the face of increasingly stringent regulatory environments, Spectra will take proactive measures to ensure compliance. This includes closely monitoring the policy changes of regulatory bodies such as the EU’s MiCA and the U.S. SEC, and adjusting its operational model and token economics framework to meet relevant requirements. Through proactive compliance, Spectra aims to reduce potential legal risks and enhance investor confidence.

Spectra will strengthen community development by actively engaging with the community and educating users, thereby increasing trust and participation on the platform. Community support will be one of the key factors for Spectra’s long-term development.

Conclusion

Spectra, a DeFi project focused on stablecoins and ETH yield optimization, provides users with a flexible and efficient yield strategy platform through its innovative yield tokenization mechanism and permissionless rate derivative market. Its core technical features, including permissionless pool creation, fixed-rate locking, yield leverage and trading, Base network-first strategy, and MetaVaults functionality, collectively form Spectra’s core competitive advantage, positioning it uniquely in the DeFi yield market.

Spectra has shown strong growth momentum and innovative potential in the DeFi yield market, but its success will depend on its ability to manage these risks and challenges effectively. By closely monitoring regulatory dynamics, optimizing technological security, and enhancing market transparency, Spectra is expected to achieve sustainable development in the competitive DeFi ecosystem, providing users with a more efficient and reliable yield solution.