Yeti Finance
About
Yeti Finance is a lending protocol on Avalanche that enables users to borrow against a diversified portfolio of LP tokens, staked assets (like sJOE and sAVAX), and yield-bearing stablecoins in a single debt position. Borrowers receive YUSD, an overcollateralized stablecoin, while continuing to earn rewards from their deposited collaterals which are auto-compounded by the protocol.
Where Does Yield Come From?
Yield generation in Yeti Finance works through several methods:
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Automatically Reinvesting Rewards from Deposited Assets: Users deposit assets that already generate rewards (like JOE, WAVAX, CRV, QI). The protocol automatically collects these rewards, sells them for more of the underlying asset, and adds them back to the user's deposit. The protocol takes a small cut during this process.
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Earnings from the Stability Pool: Users can deposit YUSD (the protocol's stablecoin) into a pool that helps keep the system stable. When a borrower's position is liquidated (because it has too little collateral), the pool receives the liquidated collateral. Providers earn roughly 10% of the difference between the collateral's value and the debt, plus a gas compensation (200 YUSD and 0.5% of the liquidated collateral). They also earn YETI tokens as farming rewards for providing stability.
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Sharing of Redemption Fees: When someone redeems YUSD for the underlying collateral (at $1 per YUSD, minus fees), 20% of that fee is returned to the borrower whose collateral was taken, compensating them for losing that exposure.
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How the Protocol Makes Money: The protocol earns revenue from: a one-time borrowing fee, a daily interest rate (starting at 0.5%) on borrowed YUSD based on the collateral mix, 80% of redemption fees, and a cut from the automatic reinvesting of rewards (which varies by asset). These fees support protocol operations and long-term sustainability.
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How Interest is Calculated: Interest is applied daily and depends on the types of collateral a user has deposited. Each collateral type has its own interest rate. The user's overall rate is a weighted average based on their collateral mix. Rates are updated automatically once per day or can be triggered externally.
Audits
| Audit / Date | Findings | Verdict |
|---|---|---|
Dedaub21-12-2021 |
| The audit identified no critical vulnerabilities and one high-severity issue that was resolved, along with multiple medium/low and advisory findings addressing code quality and edge cases. The protocol maintains Liquity-inspired design with noted centralization risks due to owner-controlled safety parameters. |
Dedaub23-01-2022 |
| All critical issues were resolved and no high severity vulnerabilities were identified, though the audit was limited to changed lines and noted some centralization concerns in the protocol's safety ratio management. |
Three Sigma Labs07-03-2022 - 20-03-2022 |
| Three Sigma Labs conducted a 5-person week audit of Yeti Finance's novel multi-collateral borrowing protocol, identifying several areas for improvement in the complex liquidation and redemption mechanisms inherited from Liquity but extended to handle diverse asset portfolios. |
| The Haechi audit represents part of Yeti Finance's multi-layered security approach, but without access to the report details, the specific impact and resolution status of identified issues cannot be assessed. | |
Code4rena16-12-2021 - 22-12-2021 |
| The audit revealed critical access control and accounting flaws, though the most severe issues were in an experimental wrapped asset subsystem that has since been removed; remaining medium-severity risks require careful remediation to ensure protocol safety. |
| This economic model analysis provides parameterization insights for Yeti Finance but does not constitute a security audit or address code-level vulnerabilities that would impact protocol safety. |
Legal
Status and notes
Terms of Service reference "Sapiens Research" as entity offering access to Yeti Finance protocol. Arbitration and governing law specified as British Virgin Islands. No U.S./U.K. persons allowed per terms. No explicit legal entity form or registration jurisdiction disclosed in official docs/yeti.finance.