What is Yeti Finance?

Yeti Finance is an interest-free decentralized borrowing protocol that allows users to borrow up to 21x 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 of 110%. 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.

What is the motivation behind Yeti Finance?

There are existing lending platforms on Avalanche, but Yeti Finance creates a more capital efficient way to borrow stablecoins by using yield-bearing assets as collateral.
Yeti Finance’s key benefits include:
  • 0% Interest Rate — as a borrower, there’s no need to worry about constantly accruing debt
  • Minimum Collateral Ratio of 110% — more efficient usage of deposited asset which leads to up to 11x leverage on non-stablecoin assets. We offer even higher leverage on yield-bearing stables.
  • 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. It captures the fee revenue that is generated by the system and incentivizes early adopters and frontends. 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. However, there is no accruing interest on loans on Yeti Finance. You can keep your loan outstanding for as long as you want without paying anything extra.
Deposit fees are demand-driven. Their purpose is to de-incentivize 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 is a more market driven approach as opposed to Abracadabra's strategy of simply having hard caps on risky collateral types. It 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 ecosystem is 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.
Deposit/Withdrawal/Redemption fees are all paid in YUSD. We also have another revenue source, which is that the protocol takes a cut of the yield earned on collateral deposited in Yeti.

How can I earn money using Yeti Finance?

There are multiple ways to generate revenue using Yeti Finance:
  • Utilize Yeti's unique leveraged yield farming strategies
  • Deposit YUSD to the Stability Pool and earn liquidation gains (in the form of collateral) and YETI rewards.
  • Provide liquidity on Trader Joe's for YUSD or YETI or on Curve for YUSD.
  • Borrow against your yield-bearing assets and purchase yield-bearing assets with the borrowed funds to maximize your returns.
  • More Details here