# \[Proposal\] Allocate Treasury Assets to Spectra LP

**URL:** <https://gov.yearn.fi/t/proposal-allocate-treasury-assets-to-spectra-lp/14495>\
**Category:** Finance\
**Created:** [21 May 2025 08:39 UTC](https://gov.yearn.fi/t/proposal-allocate-treasury-assets-to-spectra-lp/14495 "2025-05-21T08:39:55Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![Finanzgoblin](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/finanzgoblin/32/4945_2.png) [@Finanzgoblin](https://gov.yearn.fi/u/Finanzgoblin)\
**Post date:** [21 May 2025 08:39 UTC](https://gov.yearn.fi/t/proposal-allocate-treasury-assets-to-spectra-lp/14495/1 "2025-05-21T08:39:55Z")

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## **Proposal TL;DR**

Allocate $100k of Yearn Treasury Stablecoins from active yv3 vaults to Spectra PT/IBT-Curve Pools in a Pilot Program

## **Summary**

This proposal seeks approval to refactor $100,000 of [Yearn Treasury assets](https://debank.com/profile/0x93A62dA5a14C80f265DAbC077fCEE437B1a0Efde) from the yv3-crvUSD vault ([yvcrvUSD-2](https://etherscan.io/token/0xbf319ddc2edc1eb6fdf9910e39b37be221c8805f?a=0x93a62da5a14c80f265dabc077fcee437b1a0efde#code)) into PT and YT, leveraging the existing yv3/ERC-4626 composability to enhance treasury returns.

## **Background**

The Yearn Treasury (treasury.ychad.eth) currently holds **~$7.8M** across USDC, crvUSD, DAI, USDS, and other blue-chip assets in Yearn v3 vaults. These vaults deliver **2–5% APY** , but they miss out on an additional layer of returns that capitalizes on yield volatility itself.

Spectra Finance enables **any yv3 vault** (any ERC-4626) to be split into a **Principal Token (PT)**, locking in a fixed yield, and a **Yield Token (YT)**, capturing the floating yield, **in a permissionless manner**. When tokenizing the yv3 vault, the liquidity is automatically zapped into a **Curve stableswap PT-IBT-pool**.

 ![](https://europe1.discourse-cdn.com/flex013/uploads/yearn/original/2X/0/038baf7051cfa28d853f0c2fd0cb34fedad24c17.png)

This unlocks a new layer of capital efficiency by combining:

- the base vault APY
- fixed-rate returns via PT
- Curve swap fees on PT/IBT trades
- Spectra incentives

## **Motivation**

This proposal aims to unlock an additional layer of yield from Yearn v3 vaults by leveraging permissionless DeFi-native infrastructure. While Yearn v3 vaults currently generate base yield, they do not capture value from yield volatility itself. By splitting vault positions into **Principal Tokens (PT)** and **Yield Tokens (YT)** via **Spectra** , and zapping the **Yearn v3 vault** of an **interest-bearing token (IBT)** into **PT-IBT Curve-stableswap pools** , the treasury can earn additional returns through swap fees driven by the yield volatility itself, as well as Spectra incentives. This pilot also serves as a proof of concept, demonstrating the composability and productive deployment of Yearn v3 vaults in the broader DeFi ecosystem.

 ![](https://europe1.discourse-cdn.com/flex013/uploads/yearn/original/2X/0/07eb8d17c0e3838518a041d17ccdea76a3002362.jpeg)

## Benefits

- **Higher Capital Efficiency:** Generates returns on both yield and yield volatility
- **Composability:** Operates on top of Yearn’s existing vault architecture
- **Protocol Synergy:** Introduces/Increases strategic alignment between Yearn, Spectra, Curve by utilizing yv3
- **No Integration Work Needed:** Everything is available via existing interfaces

## Risks

- **Smart Contract Risk:** Spectra is audited and follows the highest standards of secure product development; Curve is battle-tested. Pilot size reduces exposure.

- **Liquidity Risk:** PT/IBT pairs may have limited depth initially, but if held to maturity

- **Impermanent Loss:** PT and IBT are highly correlated; Curve stableswap AMM reduces impermanent loss risk.

## **Proposal:**

This proposal seeks approval to refactor $100,000 of [Yearn Treasury assets](https://debank.com/profile/0x93A62dA5a14C80f265DAbC077fCEE437B1a0Efde) from the yv3-crvUSD vault ([yvcrvUSD-2](https://etherscan.io/token/0xbf319ddc2edc1eb6fdf9910e39b37be221c8805f?a=0x93a62da5a14c80f265dabc077fcee437b1a0efde#code)) into PT and YT, leveraging the existing yv3/ERC-4626 composability to enhance treasury returns. We propose a duration of 6 months and are interested in kicking off the discussion to get feedback on the vault selection.

## **Specification**

**For** :  
Proceed with allocating $100,000 from the yvcrvUSD-2 vault to a 6-month pilot using Spectra and refactoring the liquidity into PT+YT and zapping it into PT/IBT-Curve Pools.

**Against** :  
Do not proceed with the proposed $100,000 pilot program.

**Poll** :

_Poll ([view on site](https://gov.yearn.fi/t/proposal-allocate-treasury-assets-to-spectra-lp/14495/1))_

## **Further Resources**

**[Spectra Yield Strategy Guide for Liquidity Providers - Google Docs](https://docs.google.com/document/d/1LYPI7FO2V9a9XUXCd_NXCF-8zbHk0F_2e4oEINXe3W0/edit?tab=t.0)**

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<div class="post-metadata">

**Author:** ![system](https://europe1.discourse-cdn.com/flex013/uploads/yearn/original/2X/9/9ae7183c96201b2e9a60ad06d0d7664a3e90aeb0.png) [@system](https://gov.yearn.fi/u/system)\
**Post date:** [28 May 2025 08:40 UTC](https://gov.yearn.fi/t/proposal-allocate-treasury-assets-to-spectra-lp/14495/2 "2025-05-28T08:40:11Z")

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