What is Yeti Finance?
Yeti Finance is a decentralized borrowing protocol that allows users to borrow against their entire portfolio of assets on Avalanche.
Loans are paid out in YUSD (a USD pegged stablecoin) and need to maintain a minimum collateral ratio varies per asset but can be as low as 105%. Yeti Finance will support borrowing against:
Base level assets (WAVAX, WETH.e, WBTC.e, LINK.e, JOE)
Staked assets e.g. sJOE
Trader Joe and Curve LP tokens
Deposited collateral on the Benqi, Aave, and Banker Joe lending markets.
Yeti Finance is decentralized and completely non-custodial.
Please read our DISCLAIMERS: RISK OF USING PROTOCOL before using our protocol and interacting with YETI or the YUSD token.
What is the motivation behind Yeti Finance?
Yeti Finance creates a more capital efficient way to borrow stablecoins by using yield-bearing assets as collateral.
Yeti Finance’s key benefits include:
Minimum Collateral Ratio as low as 105% resulting in higher loan to value ratios and higher liquidation thresholds resulting in more efficient usage of deposited assets.
Yield bearing assets can be used to generate extra yield while safely providing collateral
Directly redeemable — YUSD can be redeemed at face value for the underlying collateral at any time
Portfolio Borrowing — Rather than one individual debt position for each of your assets (as with Abracadabra), users can borrow against all their assets at once. This means if one individual asset goes down in value, but other ones go up, the overall value of your collateral will remain high and you will not be at risk of liquidation.
What are YUSD and YETI?
YUSD is the USD-pegged stablecoin used to pay out loans on the Yeti Finance protocol. At any time it can be redeemed against the underlying collateral at face value. Learn more about the stability mechanism.
YETI is the secondary token issued by Yeti Finance. The total YETI supply is capped at
500,000,000 tokens. For more information on how the tokens are allocated and released over time, check out our tokenomics: YETI Rewards and Tokenomics.
Does Yeti Finance have any fees?
Borrowers pay two types of one-time fees: a one-time deposit fee on deposited collateral into the platform, and a one-time borrow fee when new YUSD debt is extended.
Deposit fees are demand-driven. Their purpose is to disincentivize too much risky collateral from backing YUSD. As a given risky collateral type makes up a higher percentage of the overall collateral of Yeti, the fees on it increase. This more market-driven approach allows Yeti Finance to capture revenue commensurate with the demand for borrowing against these risky collateral types. Deposit and Borrow fees are simply added to your YUSD debt amount. When/if you want to pay down your debt, you'll pay the fee amount at that time.
The third fee in the Yeti Finance protocol is interest. Each day, interest is applied based on the collateral makeup of a borrower's trove, increasing their YUSD Debt amount.
Additionally, not related to borrowing, there are also redemption fees. At any time, YUSD can be redeemed for $1 worth of collateral. This process is called a 'redemption,' and there is a variable fee charged on this process which is a minimum of 0.5%. Redemption fees increase during periods where there is significant redemption demand, and then decay back down again when fewer redemptions are occurring. Redemption fees are paid by the user who redeems, not the borrower who is being redeemed against. The redemption fee is directed to the borrower who is redeemed.
All fees are paid in YUSD.
How can I utilize Yeti Finance?
There are multiple ways to use Yeti Finance:
Depositing and borrowing against your crypto assets
Deposit YUSD to the Stability Pool and earn liquidation gains (in the form of collateral) and YETI rewards.
More Details here