Spectra debuts on Flare, bringing yield tokenization to the network

Launching on Flare, Spectra offers users a new way to trade and manage returns by splitting fixed and variable returns.

Spectra, a yield trading platform, is now live on Flare, introducing a new way for users to buy, sell and manage the yields of interest-bearing assets. The platform allows users to separate the fixed and variable return components, a structure that could expand how investors earn, trade and manage returns within the Flare network.

How does Spectra work?

At its core, Spectra The protocol splits all yield-bearing tokens (e.g. sFLR) on Flare into two parts that can be used independently of each other. The Principal Tokens (PTs) represent the principal value of the underlying asset and are designed to reach their full face value at maturity. By holding PTs, users can lock in predictable, fixed returns.

Yield Tokens (YTs), on the other hand, represent the right to future yield that the asset will generate. YTs can be traded independently, giving users a way to speculate or hedge against changes in interest rates.

By making the proceeds composable and tradable, Spectra opens the door to new, flexible DeFi strategies. Users can lock in income, take on exposure to leveraged returns, or use these tokens as building blocks for new products in the Flare ecosystem. The tokens can also serve as collateral in future lending protocols, adding potential utility assets across the ecosystem.

The arrival of yield tokenization by Spectra marks a notable development for Flare. Developers and liquidity providers gain access to new building blocks for products such as fixed-rate loans, leveraged markets or structured finance products. The model also increases capital efficiency by allowing the same assets to circulate across multiple protocols, an important feature for networks looking to attract institutional participation.

Spectra introduces a core financial primitive to the Flare ecosystem – yield tokenization – marking an important step towards a more mature, interconnected onchain economy. This not only broadens the toolkit available to developers and liquidity providers, but also strengthens the foundation for long-term ecosystem growth and institutional adoption.

Who is it intended for?

Spectra allows anyone to launch their own yield trading market for assets like sFLR or FAssets and earn fees on swaps in a model similar to Uniswap. While this system attracts advanced DeFi users and institutions seeking control over on-chain returns, newcomers and the broader Flare community can also use Spectra.

The Flat rate tool in the Spectra app, anyone can obtain PTs and record a known, predictable outcome, for example: pay 1 today, receive ~1.1 in X days. It’s a way for users to get the first taste of returns, 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 include a liquidity pool for its native sFLR token that will support both fixed rate markets (where PTs are minted and traded) and yield leveraged markets (where YTs are minted and traded). Liquidity providers earn swap fees from PT and YT trading and may receive additional rewards such as rFLR or SPECTRA. Expanding liquidity in Spectra’s pools on Flare will be a priority in the first few weeks Firelight‘s stXRP is expected to be added next, expanding the range of markets available to users and developers.

Users can use the protocol by holding PTs for fixed returns, trading YTs to adjust yield exposure, or providing liquidity to support and earn trading fees. Spectra is now available on Flare, with more information accessible via its official website.