Yield Protocol


Yield Protocol allows for fixed-rate borrowing and lending for fixed terms.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
What we like
Yield pioneered fixed-rate and fixed-term borrowing and lending.
What we like less
Lack of decentralization as Yield does not currently have a token, nor are there any plans to release one.
What it means for you
Offers you a great way to earn more reliable fixed interest rates that are not prone to fluctuations from supply and demand.

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Key Metrics
  • TVL: $472.8K (Rank #202)
  • TVL Ranking by Lending: #41
  • Blockchain: Arbitrum, Ethereum
  • Chain TVL
    • Arbitrum: $405.48K
    • Ethereum: $67.35K
Risk Assessment
Watch Out
Protocol Code Quality
  • Code reviewed by several experienced auditors; OpenZeppelin audited in May 2022
  • Public team promotes accountability
  • No documented protocol hacks since launch
Protocol Maturity
  • Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 20% by total value locked slightly reduces risk
  • Multisig wallet controls protocol upgrades
  • Multisig requires only one signer (EOA wallet) which implies the protocol is highly centralized as control resides with just one admin
  • Timelock is less than 48hrs, which provides users with less time to exit if any malicious upgrades are approved
  • No governance token and/or contracts are fully immutable
Protocol Design
  • No death spiral concerns
  • Poor mechanisms to mitigate oracle price manipulation
  • Cross-collateral markets are exposed to systemic risks as each asset creates incremental risks for the platform as a whole
  • Basic controls in place to prevent risky borrowing
  • Solid mechanisms in place to ensure healthy liquidations
  • No reserves or no stability module
Things to know about Yield Protocol

How Yield Protocol works

Yield is a protocol that offers fixed-rate yield products for both borrowers and lenders. Borrowers deposit ERC-20 tokens on the platform and choose from a few maturity dates for the loans. The fixed rates are guaranteed until the loan matures. After that, the user interest rates will change to a variable rate. Users can repay the loan at any time, with early repayment potentially impacting the effective interest rate received. Lenders on Yield are essentially buying future cash payments from borrowers at a discount. These future cash payments are represented by fyTokens. fyTokens can be redeemed 1-to-1 for a base asset at some future date. These tokens are similar to zero-coupon bonds in the sense that they do not pay interest but rather trade at a discount and can be redeemed for a profit when they are redeemed for their full face value. fyTokens are fungible and the user's position can be closed at any time by selling the fyTokens, though this may change the effective interest received. Users can also deposit assets into liquidity pools on Yield that earns fees from borrowers and lenders. When the liquidity pool's maturity date is reached, strategies automatically rollover liquidity from one pool to a later-dated pool. Yield pools all funds to earn variable fees from automated market makers (AMMs) like Uniswap or Curve. This means users may experience impermanent loss and returns are not guaranteed.

How Yield Protocol makes money

Yield does not currently have any protocol fees. In the future, the protocol will have an option to turn on fees to charge borrowers on the platform.

How you make money on Yield Protocol

You can deposit assets on Yield to earn a fixed yield rate based on the maturity date.

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