Spectra (formerly APWine) officially launched in June 2024, delivering DeFi’s first permissionless yield protocol alongside its flagship app. Since then, the protocol has maintained a TVL of >$20M, with more than $6M on the Base network alone.

Spectra now offers the industry's top fixed-rate opportunities for stablecoins and ETH. Our pools drive growth for other projects and receive significant public interest in apps built on the Spectra protocol.

This article will discuss Spectra’s next chapter, made of 5 pillars:

• The $SPECTRA token

• The release of App V2

• A Base-first approach

• Expanding synergies with Curve Finance

• MetaVaults

On 2 December 2024, a proposal outlining the $APW token's migration to $SPECTRA was posted on the Spectra governance forum. This migration reflects the protocol’s evolution and readiness to embrace a new chapter, driven by both timing and a refined tokenomics framework.

While $APW remained central to Spectra governance during this transition, it also carried the technological debt and immutability of the APWine era. As Spectra positions itself as a decentralized and permissionless financial primitive, its tokenomics must evolve alongside the protocol to better support liquidity bootstrapping mechanisms, such as bribes and protocol fees.

With several months of protocol operation behind us, the migration to $SPECTRA aligns governance, liquidity strategies, and recognition under a unified identity, positioning the SPECTRA token as the foundation for Spectra's continued growth.

New Tokenomics Framework

Under the new tokenomics framework, all Spectra governance activities—proposal voting, gauge voting, and claiming veSPECTRA rewards—will take place on Base, significantly reducing entry barriers for new participants. The forum proposal outlines the migration details for the existing veAPW holders.

The proposed tokenomics framework adopts a Base-first strategy for the SPECTRA token, positioning the Base ecosystem and its decentralized exchanges as the foundation for bootstrapping SPECTRA’s liquidity.

The proposal features a 1:20 (APW:SPECTRA) migration ratio, capping the SPECTRA token theoretical max supply at 1B units.

Additionally, the migration involves burning the DAO’s remaining APW supply initially allocated for incentives and progressively minting SPECTRA tokens instead. This process employs a curve formula that sets a maximum total supply below the current one (proportionally to the APW:SPECTRA ratio), ensuring non-dilutive migration.

The Right Timing

As the year’s fastest-growing EVM, Base leverages its rapidly expanding user base driven by the Coinbase ecosystem, cementing its central role within the Optimism Superchain. Deploying SPECTRA on the Base Network strategically places the Spectra ecosystem at the forefront of DeFi’s ongoing expansion.

The App V2 addresses user feedback since the V1 launch with the following changes, adjustments, and improvements:

• The V2 better resembles an actual trading environment

• Brings all product pages to the center view, allowing for a much clearer interaction

• Key action modules better highlight benefits to users—aiming for increased user success rates

• Introduces efficient APY charts with numerous data points for more informed user decisions

• Aggregates products from all networks into a single page, allowing users to preview all available opportunities at a glance

• Introduces audited zap module, allowing users to get started with a wide range of tokens from their wallet

Most importantly, key product pages—Pools, Fixed Rate, Yield Leverage, and Portfolio—will be available on mobile devices, making the Spectra protocol usable to a mobile-first Base audience.

Spectra strengthens Base’s permissionless DeFi stack by introducing a critical financial component—interest rate derivatives. Deploying the SPECTRA token on Base ensures users can obtain it with low network costs while broadening its usability across the DeFi ecosystem.

Positioning Base as the central network for SPECTRA’s liquidity addresses key barriers to governance participation. Lower costs for acquiring SPECTRA and performing on-chain actions like gauge voting are critical during the early bootstrapping phase of new Spectra pools.

Aerodrome, the leading DEX on Base, has demonstrated a powerful flywheel effect for liquidity bootstrapping, effectively supporting projects such as Origin’s SuperOETH and Moonwell’s WELL.

Launching a SPECTRA pool on Aerodrome, bolstered by AERO emissions and Base’s low-cost, rapidly growing ecosystem, offers a more efficient liquidity environment than existing APW setups on Ethereum Mainnet.

Furthermore, Perspective SAS, Spectra’s development team, will intensify business development efforts on Base, focusing on building stronger relationships with Base-native projects and community leaders.

For Spectra's flagship front-end, the team is adopting a Base-first strategy, leveraging the tools and infrastructure provided by the Base/Coinbase developer platform to enhance functionality and user experience.

The fourth pillar of Spectra’s next chapter focuses on deeper collaboration with Curve Finance’s core contributors. Together, we have worked to enhance the efficiency of Spectra pools, which Curve’s AMM powers.

While Spectra’s yield primitives adhere to the ERC-20 standard, their technical nuances, constraints, and maturities demand unique pool parameters to enable effective yield swaps.

Early in the lifecycle of Spectra App V1, inefficiencies emerged—pools with adequate TVL and sufficient Principal Tokens were often unable to support even small trades. These issues led to reduced protocol activity, user frustration, and a lack of organic growth through word of mouth.

We have successfully addressed these challenges after extensive collaboration with Curve’s team. Newly deployed Spectra pools now feature optimized parameters, eliminating the inefficiencies that previously hindered trading activity.

Why does efficient pool architecture matter?

Better liquidity leads to better user rates, driving greater adoption of Spectra products. This increased usability translates to higher rewards for LPs, making pools more attractive and drawing in new liquidity. More liquidity means deeper trades can be facilitated, creating a positive feedback loop that scales the protocol’s impact.

MetaVaults are in the final stages of internal development at Spectra’s devco, Perspective SAS, and are planned for release in Q1 2025. This innovative technology has been under development throughout 2024 and is set to revolutionize liquidity provision for DeFi’s interest rate derivatives.

MetaVaults address critical challenges in the current liquidity model. First, they resolve liquidity fragmentation. Currently, when a pool expires, LPs must manually reallocate funds to new pools—a process that often leads to turbulence, reduced TVL, and inefficiencies as liquidity remains idle. MetaVaults solve this by automating pool redeployment and enabling seamless liquidity rollovers, allowing LPs to participate in a true "set-and-forget" manner.

Second, MetaVaults enhance pool’s yield by automatically converting Yield Token (YT) accruals into additional LP tokens. Today, this process requires manual intervention, which is both time-consuming and cost-inefficient. MetaVaults unlock greater yield for LPs without additional effort by automating this conversion.

Finally, MetaVault design introduces customizable features, drawing inspiration from Morpho’s Vaults' success. This flexibility will allow third-party curators to design and launch yield markets with tailored parameters and branding, casting a wider net for attracting new liquidity providers and expanding Spectra’s ecosystem reach.

MetaVaults represent a pivotal advancement, setting the stage for sustainable growth and a more streamlined, user-centric liquidity experience.

Spectra’s App V2 is scheduled for release in 2024. The APW → SPECTRA token migration is currently under community discussion, with its timeline dependent on community approval. If adopted within the next two weeks, these changes could be executed by the end of 2024.

The new pool architecture is already reflected in newly deployed pools, improving swap efficiency. MetaVault release trajectory looks optimistic for Q1 2025. While the Base-first strategy marks a key focus, SPECTRA’s gradual liquidity expansion to additional networks remains a longer-term objective.