Yield Bearing Collateral
Please review Disclaimer: Risk of Using Protocol and Terms of Service before using the Yeti Finance and/or interacting with YETI or YUSD. Yeti Finance & YETI/YUSD are not avaliable in the U.S.
Yield bearing assets are assets that earn yield. Some examples are LP tokens, Yearn Vault Tokens, aTokens, cTokens, and more.
On Avalanche, there are already well-developed lending markets to borrow against base-level assets such as WETH or AVAX. But for many yield-bearing assets, there is no other place to borrow against them and lever up. Borrowers on Yeti continue earning yields on their collateral while also now being able to lever up on these assets.
Yeti Finance will be accepting a variety of highly liquid collateral from the largest projects in the Avalanche ecosystem. This includes:
- Staked assets e.g. sJOE
- Trader Joe and Curve LP tokens
- Deposited collateral on the Benqi and Aave lending markets.
Yeti Finance will also accept base-level tokens such as WAVAX, WETH, WBTC, and JOE as collateral. Yield-bearing collateral will continue to earn the farming rewards they otherwise would have. For example, Trader Joe LP tokens are staked on behalf of users to continue earning JOE rewards. Similarly, Curve LP tokens used as collateral continue earning any farming rewards and Avalanche rush incentives. The same is true for collateral from the lending markets listed above.
The code automatically auto-compounds farming rewards for your collaterals deposited in Yeti.
On most collaterals, Yeti Finance takes a cut of the farming reward at the time of the auto-compound. This is true for Curve and Trader Joe LP tokens as well as sJOE.
However, for lending market collateral (deposited collateral on Aave or Benqi), Yeti Finance also takes a cut of the intrinsic yield generated by the collateral.
Our philosophy is we want to make the best farming experience possible while building a sustainable economic model around it. We realize that the best way to do this is to align incentives. The one-time fees will be a one revenue stream, but the primary way we make money is auto-compound/cut of yield. And it's incentive-aligned in the sense that the protocol only makes money if our users do.
Our site displays yield opportunities net of Yeti's cut of yield, which varies depending on the collateral type.