SIR Review: New DeFi Protocol for Safer Leverage

SIR Trading is a decentralized DeFi protocol focused on enabling safer, long-term leveraged trading without the constant pressure of funding fees or aggressive liquidation mechanics. By allowing users to create and interact with permissionless leveraged vaults backed by transparent smart contracts and reliable price oracles, SIR aims to make leverage more predictable, composable, and accessible within the DeFi ecosystem. Read this SIR Review to know more about the platform.

What is SIR?

SIR is a DeFi protocol built to solve the core problems of leveraged trading—volatility decay, liquidation risk, and high holding costs—making leverage safer and more suitable for long-term investing.

Unlike traditional leveraged ETFs or products such as Squeeth, which lose value over time in sideways or volatile markets, SIR eliminates volatility decay by design. Its leveraged tokens track price exposure using a theoretical power-law formula, removing the need for continuous rebalancing trades. As a result, leveraged tokens maintain value consistency even when the underlying asset returns to the same price level over time.

SIR also removes one of the biggest frictions in leveraged trading: funding fees. There are no ongoing fees for holding positions. Users only pay fees when minting or burning leveraged tokens, significantly reducing the cost of maintaining long-term leverage.

Built to be maximally trustless, SIR relies on immutable, non-upgradable smart contracts and Uniswap v3 price oracles. The protocol supports permissionless vault creation, allowing anyone to deploy leveraged vaults defined by a collateral token (COL), debt token (DBT), and leverage factor. This design offers flexible, transparent, and composable leverage without centralized control.

Also, you may read Top 8 Polymarket Trading Terminals

SIR Review: Gentlemen & Apes

SIR divides participants into two distinct roles: Gentlemen and Apes, each serving a specific function in the protocol.

Gentlemen are liquidity providers. They supply capital to SIR’s vaults, enabling leveraged trading to exist in the first place. In return, they earn fees generated by the protocol and, in selected vaults, additional rewards in SIR’s native token. Their liquidity positions are tokenized as TEA, an ERC-1155 token, allowing positions to be tracked, managed, and composed on-chain.

Apes are leveraged traders. They choose which asset pair they want exposure to and select their desired leverage. Apes pay fees only when minting or burning their leveraged position, not while holding it. Their exposure is represented by APE, a leveraged ERC-20 token that can be freely transferred or used across other DeFi protocols.

Together, this structure cleanly separates risk providers (Gentlemen) from risk takers (Apes), allowing SIR to offer trustless, permissionless, and more predictable leveraged trading without ongoing funding fees.

Also, you may read Top 10 Polymarket Alert Bots

SIR Review: Protocol Owned Liquidity

Protocol-Owned Liquidity (POL) represents a structural shift in how DeFi protocols manage liquidity. Instead of continuously renting liquidity through emissions and incentives, SIR builds permanent liquidity ownership that compounds over time, creating a durable and self-sustaining foundation for the protocol.

By accumulating liquidity directly on its balance sheet, SIR reduces dependency on short-term incentives while strengthening long-term stability, depth, and resilience across all market conditions.

Also, you may read Top 10 PolyMarket Analytics Tools

The 9% Mechanism

How It Works

When liquidity providers (“Gentlemen”) deposit assets to mint TEA tokens:

• 91% becomes active liquidity controlled by the depositor
• 9% is permanently allocated to Protocol-Owned Liquidity (POL) as a one-time contribution
• Both portions earn trading fees generated by APE leverage positions

This 9% allocation is not a traditional fee. It is a strategic contribution that strengthens protocol sustainability while still allowing liquidity providers to earn competitive returns.

Also, you may read Hyperliquid vs Rollx vs AsterDEX vs Avantis vs Paradex

Why 9%?

The 9% rate is carefully calibrated to balance multiple objectives:

• Meaningful accumulation: Sufficient to build substantial POL over time
• LP profitability: Low enough to preserve attractive returns for liquidity providers
• Market competitiveness: Comparable to or better than withdrawal fees in similar protocols
• No lock-ups: Unlike competitors, SIR does not impose mandatory lock periods

Also, you may read Top 10 Best Trading Podcast

SIR Review: Tokenomics

The SIR token is the primary value-accrual mechanism of the SIR protocol. SIR holders can stake their tokens to earn a share of protocol revenue, creating a direct and transparent link between protocol usage and tokenholder returns.

All protocol fees are converted into ETH through an on-chain auction mechanism and distributed proportionally to SIR stakers. This structure gives tokenholders a clear claim on real protocol revenue rather than inflationary rewards.

Also, you may read Top 10 Best Crypto Trading Exchanges

How Staking Works

To earn protocol dividends, SIR holders must stake their tokens, temporarily removing them from circulation. Staking aligns tokenholders with the long-term success of the protocol while granting access to real revenue generated by protocol activity.

Key features include:

• Flexible operations: Stake, unstake, and claim dividends at any time
• WETH dividends: All protocol fees are converted to WETH via auctions for consistent, non-inflationary payouts
• Pro-rata distribution: Rewards are distributed proportionally based on the amount of SIR staked

Also, you may read TOP 6 Play to Earn Crypto Games

SIR Review: Token Auctions

The SIR protocol accrues fees in a variety of ERC-20 tokens. Distributing these tokens directly to stakers would be inefficient, costly in gas, and operationally complex. To address this, SIR employs a trustless on-chain auction mechanism that converts all accrued tokens into WETH, enabling simple and consistent dividend distribution.

This approach standardizes payouts, minimizes overhead, and ensures that stakers receive rewards in a widely accepted and composable asset.

Also, you may read Earn 17% yield on Stable coins on Solana

Auction Mechanics

For each unique ERC-20 token accrued by the protocol (identified by contract address), SIR opens a weekly auction:

• Each auction runs for one day
• Participants place ETH bids to purchase the accrued tokens
• The highest bidder at the end of the auction wins the tokens
• Outbid participants receive immediate refunds
• Anyone can execute the settlement transaction, ensuring permissionless completion
• The winning bidder receives the tokens, while the protocol collects ETH

All ETH collected through auctions is wrapped into WETH and distributed to SIR stakers as protocol dividends.

Also, you may read How to EARN MORE Crypto with Hylo, Exponent, and Rate-X – Try NOW!

Incentives for Participants

This system transforms MEV-style bidding, often viewed as extractive, into a constructive mechanism that benefits the protocol and its users.

• Enables trustless conversion of arbitrary tokens into WETH
• Allows sophisticated market participants to compete for pricing efficiency
• Eliminates reliance on centralized swaps or governance intervention
• Ensures fair market pricing through open competition

While bids are placed in ETH for simplicity, stakers receive dividends in WETH, combining operational efficiency with user convenience.

Also, you may read Top 10 Best Websites to Buy Backlinks

SIR Review: Security

SIR Trading places strong emphasis on protocol security and audit transparency, with multiple independent security reviews covering both design assumptions and edge cases. The protocol’s smart contracts have been audited by reputable firms including Egis Security, Custodia Security, Syzygy, and Guild Audits, with findings publicly disclosed to ensure accountability.

The audit snapshot shown highlights a low-risk issue related to token compatibility during vault creation, specifically with tokens like MKR that return bytes32 instead of strings for metadata. The issue was clearly documented, assessed as low severity, and fully fixed, demonstrating a proactive and responsive security process. Importantly, this issue did not affect user funds or protocol integrity.

Also, you may read Padre.gg vs GmGn vs Axiom.Trade vs Alph.ai

Conclusion

SIR Trading presents a thoughtful re-architecture of leveraged trading in DeFi, prioritizing sustainability, predictability, and trust minimization over short-term incentives. By eliminating volatility decay, removing ongoing funding fees, and separating roles between liquidity providers (Gentlemen), traders (Apes), and value-accruing token holders (SIR), the protocol addresses several structural weaknesses found in traditional leveraged products.

Features such as protocol-owned liquidity, permissionless vault creation, immutable smart contracts, and ETH-denominated fee distribution further strengthen its long-term viability.

Equally important is SIR’s emphasis on security and transparency. Multiple independent audits, public disclosures, and prompt resolution of identified issues reinforce confidence in the protocol’s design and execution.

Taken together, SIR positions itself as a robust, trustless building block for long-term, low-leverage strategies in DeFi—appealing to users who value capital efficiency, composability, and durability over aggressive, high-risk trading models.

Frequently Asked Questions