Long post time.

Whether you are you are a DPRK agent, looking to gain access to funds held within a Yearn vault. Or just a user or protocol wondering what the safety of funds are when deployed to Yearn, it's good to know how exactly the vaults work and what the high risk touch points are.

For starters, Yearn uses no upgradable contracts. It is part of the ethos from the beginning and is something I am confident will never change. Once code is deployed it cannot be changed, for better or worse.

However, that doesn't mean nothing can change in how it operates. As with almost all smart contract systems there are things that can be configured and updated throughout a vaults life, some mundane, some high risk.

This post will focus entirely on the V3 vault system, but most Yearn products work (roughly) the same way.

The Yearn V3 vaults run on a "Role" system. In that each permissioned function has a specific role attached to it. These roles are built using Vyper Enumerators, you can read more about how Vyper Enum's work here: https://medium.com/@de33/enums-in-vyper-0-3-4-6ec2d387bc3a.

TLDR is that any address can hold any combination of roles, meaning the permissions are fully configurable.

While the full setup of how our roles are given out is outside of the scope of this post, as with everything it is fully codified, you can point your clanker at this contract 0xb3bd6B2E61753C311EFbCF0111f75D29706D9a41 and it should be able to explain to you each holder and what roles they are given and what that means.

For the sake of this post though, the most important and most security critical role is the ADD_STRATEGY_MANAGER. For ANY vault provider the highest risk moments in its life is adding a new yield source or strategy.

Unfortunately, many in the industry have chosen cosplay security or restrictions for the things their vaults can and cannot interact with or fund. They will claim some fancy protections held within the vault itself, but in reality the team operating it has effective unilateral control to yeet and update these meaningless restrictions at will, much of the time using arbitrary calldata provided from unknown off chain sources.

So when evaluating the relative security of any vault product, users should ask themselves, how are new yield sources added and funded.

The only way to touch funds held within a Yearn vault is to have a strategy added, so lets go through the process of what it takes to do just that.

Getting a strategy added to a Yearn vault is no easy feat, even after years of being a Yearn strategist, and building the V3 vaults themselves I struggle to get things added. And while this can be frustrating as someone who wants to build and ship things fast, it is for good reason and comes from processes developed and hardened over the course of years and started before I ever showed up.

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Step 1 : Code the Son-a-bitch

All new yield sources need to be codified. We have base contracts strategist use to make integrations simpler, but code must be etched in for each allowed interaction with the underlying protocols or yields sources being integrated.

This means not only happy path deposit, withdraw, reward selling reports etc. But also unhappy paths, deposit limits and emergency functions that may be needed in the cycle of a strategies life. Using immutable code for integrations means simplicity during operation and lower maintenance and trust, but also means if something is missed, funds are potentially bricked and there is nothing we can do about it.

Step 2: A jury of your peers

Next, up we have the peer reviews. Once a strategy is built and coded, it must go through the internal security process, the first step is getting two other strategists to peer review it.

This recent post from Tay wasn't lying, the peer review process is at the core of Yearn's security process and shapes the way strategies are built.

This means reviewing the code for obvious things like bugs or missed integration needs, as well as making sure the trust assumptions are up to standards, the setters are appropriately scoped etc. as well as getting multiple other internal people to have at least some hands on experience understanding of how the code works before it ever hits prod.

Step 3 : Stop, Security time.

Once you get a LGTM from your peer review's its time to send the strategy to security. Yearn has always had its own internal security team that has over the years found countless bugs and save untold amounts of money.

Security reviews are less focused on the operational aspects or code choices that peer reviews may be, and as it sounds fully security centric, especially around integration of the underlying protocol. Tapir is our current in house extraordinaire. He also just happens to be one of sherlock's highest rated auditors and has found bugs in many other high profile DeFi projects outside of Yearn. (He's also single for any of the 3 women left in DeFi 😉)

Step 4: Score the Son-a-bitch

Once a strategy has been fully approved for production the choice comes, what vault can it be added to and what amount of debt can it be allocated. This is where our risk reports and analysis come in. There has been much talk lately about getting more robust risk analysis about different protocols especially on factors such as governance controls, multisigs, timelocks etc. Fortunately at Yearn we have been doing this already for years.

Our security team puts together a risk report for any protocol we are planning to integrate that analyses risks such as audits history, operational, liquidity, and of course centralization and control. We have passed up on many protocols in the past that others were touting despite the higher yields due to concerns and issues with managements control of the protocol around things such as upgradability, minter roles etc.

As with everything it is all public for anyone to consume and review for both protocols as well as assets our curation team underwrites at https://curation.yearn.fi/

Based on the underlying protocol and the complexity or risk of the actual strategy itself, each strategy is finally given a risk score that dictates which vaults it can be added to.

Step 5: Monitoring the situation

Risk scores are a key function of any integration, but as we know in DeFi things change, and sometimes very fast. So a purely static report is only worth so much for integrations that are continuous.

Using the risk report that is generated during the review process, the security team will also set up monitoring services for the crucial aspects of any of the underlying protocols we integrate. We have telegram groups constantly alerting us of any parameter changes or non-normal fund movements not just for Yearn but the actual protocols we are deploying funds to as well.

What that means if you run a protocol that Yearn deposits into, just know, were watching you......

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Anyways.

So now we have our strategy built, peer reviewed, security reviewed, rated and protocol monitoring setup. How do we get it added and funded?

Step 6: The multisig (da da da dahhhhhhhh).

But worry not, this is no ordinary multisig. I would go on record to say ychad.eth is likely the most secure multisig used by any protocol in DeFi.

It is quite important to understand that not all multisigs are created equal, and the value of it lies within the details of how it works.

Just to get a txn proposed to ychad you need to build it (in code) and get yet one more reviewer's approval to send it through our internal pipeline.

yChad is a 6 of 9. Comprised of almost entirely non-yearn affiliated signers scattered all across the world, many of which are the most trusted longest standing members of DeFi such as 0xngmiI, Michael Egorov, Lefteris and more; all done with public attestations from the signers of their keys and public governance based rotations.

You can view the full signer list and public attestations here: https://docs.yearn.fi/developers/security/multisig

For those that don't remember, back in the day it was quite normal to have DeFi protocols use external signers on many of their higher risk multisigs in order to make sure that even a high threshold could not be circumvented by purely internal actors. Nowadays we have protocols controlling hundreds of millions with 2/n and 3/n multisigs made up of unknown and entirely internal signers, of which I can guarantee you more than a handful are just the same person signing with multiple keys to make it seem more secure than it is.

Step 7: Now, we wait.

Once signed and executed we go to the last step to get a strategy added, the timelock. The only address that can add strategies to a V3 vault is the timelock who has a min delay of another 7 days.

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Obviously what good is a timelock if no one is watching it, so we have our own internal monitoring of any txn proposed across every chain deployed on.

Step 8: Wait, we aren't done yet??

Finally, you have waited the week for the timelock. Your strategy can be added! This is the moment a would be attacker would be giddy with joy as they have circumvented the system that even internal strategist struggle to get code through.

But alas, adding a strategy to a vault does not inherently mean that strategy can be funded, and the timelock address itself does not have the authority to move funds within the vault, thereby adding another degree of security separation. We have one more final step which is our operational strategist multisig needs to first execute the timelock txn, and then configure our on chain debt allocator contract who holds the vaults DEBT_MANAGER_ROLE, to actually push funds from the vault into the strategy itself.

huffff

If I am being honest getting strategies through our full system is one of the great burdens of operating at Yearn.

It is one of the reasons from the outside we often appear to be slow or disregard certain opportunities. But is also why we have the best risk management of any vault provider in the industry while also being around the longest.

Immutable code, two peer reviews, one security review, a risk score, monitoring, 9 independent signers across 2 multisigs from people scattered across the globe and a week long timelock is what it takes to get a strategy added to a Yearn vault, and it is EXHAUSTING!!!

But it is non-negotiable. It is what makes Yearn Yearn. And it is why our vaults have been around longer than anyone else and will be here long after many of the new players are gone.

This is part 3 of a 3 article series. The 1st article is here and the 2nd article is here.

Most yield vaults operate on a single chain. The capital a user deposits stays on that chain, and the yield opportunities available to them are limited to protocols deployed there. If a better rate exists on a different chain, a single-chain vault can't tap into it.

yvUSD is a multichain vault that removes this constraint. Users deposit their USD stablecoins into one vault on Ethereum mainnet, and the vault can deploy capital to yield sources on other chains. The user holds a single token on mainnet, yvUSD, and never has to manually bridge assets.

This article explains how the cross-chain mechanics work, the trust model behind the design, and how it handles edge cases gracefully.

The Dual-Contract Model

Every cross-chain deployment in yvUSD involves a pair of contracts: an origin strategy on Ethereum mainnet and a remote strategy on the destination chain.

From the vault's perspective, the origin strategy looks identical to any other Yearn V3 strategy. It accepts capital, reports a total asset value, and participates in the vault's allocation. The difference is entirely in what happens behind the scenes: instead of deploying funds into a local protocol, the origin strategy bridges assets to its paired remote strategy contract on another chain.

The remote strategy receives the bridged assets and deposits them into a local yield source in an ERC-4626 vault. It periodically reports its total asset value back to the origin strategy via a cross-chain message (no tokens are transferred, just data). The origin strategy uses this reported value for the vault's total asset accounting.

The dual-contract architecture is bridge-agnostic. Each strategy pair uses whatever native bridge is considered appropriate for the destination chain. Circle's CCTP is a common choice for USDC transfers, Katana's native bridge can be used for its chain, and so on. The vault treats cross-chain capital the same as local capital regardless of which bridge carries it. Adding a new chain is a matter of deploying a new strategy pair with the right bridge integration, not modifying the vault. The cross-chain strategy code is available on GitHub.

Outbound: How Capital Reaches the Remote Chain

When the vault allocates capital to a cross-chain strategy, the outbound capital flow has three distinct phases: send, receive, and deploy.

The origin strategy sends assets through the native bridge to its paired remote strategy on the destination chain. This process is inherently asynchronous because cross-chain bridges don't offer atomic execution or callbacks. The origin strategy increments its remote asset counter at the time of sending and trusts that the assets will arrive. For CCTP-based strategies, this means USDC is burned on Ethereum and minted on the destination after Circle's attestation service confirms finality. Other bridges have their own delivery mechanisms, but the pattern is the same.

Once received, the assets sit idle in the remote strategy contract until a keeper explicitly deploys them into the local yield source using the pushFunds() function. Why not auto-deploy funds on receipt? Because not all bridging protocols support a bridge-and-call pattern. Even CCTP, which allows sending data alongside a transfer, does not guarantee execution of an attached call on the destination chain. Separating receipt from deployment ensures the design works with any bridge, regardless of its callback capabilities. This separation also means the strategy never deposits into a vault that might be paused or in a degraded state.

Inbound: How Accounting Comes Back

The origin strategy on Ethereum needs to know how much the remote position is worth. But it can't query a contract on another chain. So the system uses a push model: the remote strategy periodically sends its total asset value back to the origin via a cross-chain message.

This is a design choice with significant implications. The remote side sends an absolute value, not a delta. Each message says "I'm currently worth X," and the origin overwrites its previous understanding entirely. This "overwrite, don't accumulate" model means there's no ordering dependency between messages. If message #3 arrives before message #2, no state is corrupted - the origin just has a slightly stale view, which the next message will correct. If a message is lost or never relayed, the system doesn't drift further and further from reality; the next successful message snaps it back to the current state.

Before accepting a message, the origin strategy validates that it came through the expected path: the correct bridge transmitter, the correct source domain, the correct remote counterpart, and with sufficient finality. This prevents spoofed messages from overwriting the accounting.

Once the origin's remote asset value is updated, a keeper triggers a report on the origin strategy itself. The vault compares the strategy's reported total value (local assets plus the remote value) against its last known value, computes profit or loss, and updates the share price.

Inbound: How Capital Comes Back

When the vault needs to reclaim capital for a user to withdraw or rebalance, a keeper triggers a withdrawal on the remote strategy using processWithdrawal(). The remote strategy redeems shares from the local yield vault, bridges the freed assets back to the origin strategy on Ethereum, and immediately sends an accounting message so the origin strategy's view of remote assets reflects the reduced position.

The withdrawal is best-effort by design. If the underlying vault has withdrawal limits or liquidity constraints, the remote strategy bridges whatever it could actually free rather than reverting. This means a single withdrawal request might only partially fill. Multiple keeper calls may be needed to fully unwind a large position. The system favors partial progress over all-or-nothing failures. This design choice keeps the withdrawal pipeline moving even when the underlying yield source is constrained.

Deterministic Deployment: How Pairs Find Each Other

Both the origin and remote strategy factories use deterministic deployment schemes (CREATE on Ethereum, CREATE3 on remote chains) with salts derived from the same inputs: the vault address, the domain, and the counterpart address. This means each factory can compute the other's deployment address before either contract exists, so a new cross-chain strategy pair can be set up without any cross-chain communication during deployment.

The Full Cross-Chain Lifecycle

Putting it all together, here is the complete lifecycle of capital deployed cross-chain:

The full round trip spans multiple transactions and bridge relays across two chains. This architecture unlocks yield opportunities across chains while keeping accounting bounded and self-correcting. Every remote report and withdrawal sends a fresh total asset value, the health check on the origin catches implausible jumps, and the remote asset value is overwritten rather than accumulated, so a single valid report resets the accounting to the current state of the world.

From the user perspective, all the complexity is abstracted away, so users can deposit and withdraw without leaving everyone's favorite chain: Ethereum mainnet.

Security Model

yvUSD makes its trust model explicit and layers defenses at each boundary. Here's how each component is secured.

Bridge Infrastructure

CCTP is the bridge used in the initial deployment, and this is a deliberate choice: since the yvUSD vault's underlying asset is USDC, it is already fully exposed to Circle and all of its risks. Using CCTP as the bridge introduces no new trust assumptions beyond what the underlying asset already carries. A third-party bridge like LayerZero would add an entirely new trust dependency on top of Circle's. The same principle applies to Katana's native bridge: a native bridge relies on the same trust assumptions as trusting the chain itself when deploying strategies there, so a native L2 bridge has significantly reduced risks compared to any third-party alternative. Each strategy is configured to only accept messages that the bridge considers finalized, mitigating reorg risks (for example, it is set here in BaseCCTP.sol to the CCTP specified value).

Remote Keepers

Keepers are authorized by governance via setKeeper() and have a well-scoped role with built-in safety constraints:

• Keepers can't steal funds. The remote strategy's rescue() function explicitly blocks withdrawing the strategy asset or vault shares. Keepers can only push and pull funds between the strategy contract and its designated vault, or bridge back to the designated origin counterpart.

• Keepers trigger reports. They call report() to send accounting updates to the origin. The isReady modifier (requiring block.timestamp > lastReport) prevents multiple reports in the same block.

• Keepers coordinate withdrawals. processWithdrawal() is a keeper-only function that bridges capital back to Ethereum when needed.

Resilience Under Stress

Bridge interruptions are detected and self-healing

If a bridge experiences a temporary outage mid-transfer, the origin's health check automatically detects the discrepancy when the next remote report arrives. Once the bridge resumes normal operation, the next successful report snaps accounting back to the correct state without any need for manual intervention.

Staleness is bounded and automatically corrected

Between keeper reports, the origin's view of its remote position is frozen. The overwrite model ensures this is always self-correcting: every new message replaces the old value entirely, and a health check on the origin rejects reports that show implausible profit or loss (beyond a configured threshold, e.g. 10%). The system bounds staleness and ensures recovery is automatic with each report cycle.

In-flight funds are handled by the health check

When the origin bridges USDC to a remote chain, it immediately records the increase in remote assets. If a remote report fires before the assets arrive, the remote side reports a total value that doesn't include the in-flight amount. The health check catches this: if the apparent discrepancy exceeds bounds, the origin's report to the vault is rejected, preventing any accounting inconsistency from affecting the share price. Once the assets arrive and the next report is sent, the accounting self-corrects automatically.

Emergency shutdown preserves withdrawals

Shutdown blocks new capital from flowing outward while keeping the withdrawal path fully operational. Keepers can still pull funds from the remote vault, bridge them back, and make them available for user withdrawals on Ethereum. This asymmetry, blocking inflows while allowing outflows, ensures users can always unwind their positions.

Out-of-order messages are handled gracefully

The overwrite model eliminates the need for nonce or sequence validation on incoming messages. If a bridge delivers messages out of order, the health check gates whether the resulting value is plausible, and the next report cycle overwrites with fresh data. This is simpler and more robust than strict ordering, which would add complexity and introduce new failure modes like stuck queues.

Learn More

• CCTP cross-chain strategies repo

• Yearn yvUSD overview docs

• yvUSD developer deep dives

• Onchain contract addresses

This is part 2 of a 3 article series. The 1st article is here.

Looping is one of the oldest strategies for maximizing yield in DeFi. Deposit collateral, borrow against it, convert the borrowed asset back to collateral, deposit again, and repeat until you hit your target leverage. Every cycle amplifies your exposure to the collateral's yield.

The concept is simple, but extracting maximum value from a looped position is not. Building the position is one thing, but managing it is another. The leverage ratio must be managed, rewards must be claimed, and unwinding must take place with minimal slippage. The tokenized-looper in Yearn's new yvUSD handles all of this inside a Yearn V3 vault. Users deposit a single asset, receive ERC-4626 vault shares, and the strategy takes care of the rest.

Yearn is verifiable DeFi — everything is onchain and traceable. Let's walk through what the tokenized-looper actually delivers to yvUSD depositors and why each piece matters for yield.

1. Leveraged Yield from a Single Flashloan

The reason why looping is used in DeFi is to turn a $100k deposit into a $300k deposit. With looping, a position can earn multiple times more yield than if it was not leveraged. But this is not always a free lunch - there is a borrowing cost to pay, and looping can come with risks during the unwinding phase. Yearn always considers these risks in the early stages of design, to avoid building a strategy that exposes users to too much risk.

yvUSD uses a Morpho flashloan to reach the exact target leverage in a single step. The core logic in _lever() calculates the position size:

targetCollateral = (equity * targetLeverageRatio) / WAD
targetDebt       = targetCollateral - equity

The strategy borrows the exact flashloan amount needed (targetDebt - currentDebt), converts the full sum to collateral, supplies it to Morpho, and borrows against the new position to repay the flashloan. Because the entire operation is atomic, the position either reaches the target leverage or the transaction reverts — there is no half-built state. Slippage is bounded by a single configurable parameter. Capital starts earning at the full leverage ratio immediately, with minimal execution cost eating into returns. Withdrawals work the same way in reverse. The strategy flashloan-deleverages to free up the requested capital, so users don't need to manually unwind anything.

2. Rewards That Compound Themselves

Reward compounding is where tokenized-looper, and Yearn strategies in general, creates substantial value for depositors. Morpho markets often distribute MORPHO token rewards via Merkl. Without automation, these rewards sit unclaimed — earning nothing. The tokenized-looper turns them into additional leveraged yield automatically.

Every time the Yearn keeper calls report(), the internal _harvestAndReport() function executes three steps in sequence:

function _harvestAndReport() internal override returns (uint256 _totalAssets) {
    _claimAndSellRewards();
    _lever(Math.min(balanceOfAsset(), availableDepositLimit(address(this))));
    _totalAssets = estimatedTotalAssets();
}

First, _claimAndSellRewards() collects any accrued MORPHO rewards and sells them through an auction for the base asset. Then _lever() takes every idle token, including the freshly converted reward proceeds, and deploys them into the leveraged position at the target ratio. Finally, the strategy reports its updated total assets, which increases the vault's price per share (PPS).

The key insight is that rewards don't just get reinvested — they get amplified by the leverage ratio. If the strategy earns 0.5% annually in MORPHO rewards and operates at 3x leverage, the re-levered rewards contribute approximately 1.5% to the effective APY. That's three times the value compared to simply holding the reward tokens or reinvesting them without leverage.

This compounding happens automatically in every report() call. Over a year, the difference between "claimed, re-invested, and amplified at leverage" versus "sitting unclaimed in a Merkl contract" compounds into a meaningful APY gap — especially in markets with significant MORPHO incentives.

3. A Strategy That Knows When to Act

A leveraged position drifts as market conditions change. If the collateral appreciates relative to the debt, leverage drops and the position under-earns. If the collateral depreciates, leverage rises and liquidation risk grows. The tokenized-looper handles this with a rebalancing system designed to act only when the math says it's worth it.

The _tendTrigger() function implements a multi-condition gate:

function _tendTrigger() internal view override returns (bool) {
    if (_isLiquidatable()) return true;                // Emergency: always rebalance
    if (currentLeverage > maxLeverageRatio) return true; // Safety ceiling: always rebalance
    if (block.timestamp - lastTend < minTendInterval) return false; // Cooldown: 2 hours
    // Only rebalance if leverage drifted outside the buffer band
    if (currentLeverage > targetLeverageRatio + leverageBuffer) {
        return _isBaseFeeAcceptable();  // ...and gas is below 200 gwei
    }
    if (currentLeverage < targetLeverageRatio - leverageBuffer) {
        return _isBaseFeeAcceptable();
    }
    return false;
}

The strategy rebalances only when all of the following are true:

• Leverage has drifted outside the buffer band. With a 3x target and 0.25x buffer, the strategy tolerates leverage between 2.75x and 3.25x. Small fluctuations within this range are ignored: they cost more to correct than they're worth.

• Gas is acceptable. The maxGasPriceToTend parameter (default: 200 gwei) prevents rebalancing during gas spikes. A rebalance that costs $200 in gas to recover $50 of yield improvement simply doesn't execute.

• Enough time has passed. The minTendInterval (default: 2 hours) prevents rapid-fire rebalances during volatile periods where the position might oscillate around the buffer boundary.

• There's enough capacity. The strategy checks that there's sufficient deposit capacity and flashloan liquidity before attempting a rebalance, avoiding wasted gas on transactions that would fail.

When rebalancing does trigger, the LooperKeeper contract batches multiple operations: liquidity reallocation via Morpho's PublicAllocator, reward claims, and the actual tend. This further reduces overall gas costs. The result is that leverage stays within a tight range of optimal without bleeding yield to unnecessary gas.

Yearn is verifiable DeFi, so we can verify everything onchain. Every looper strategy in Yearn has a target leverage ratio, a max leverage ratio, and a current leverage ratio that keeps the strategy within reasonable limits. You can query the values directly from onchain data, or take a shortcut and use this Python script to pull the data for you.

4. Yield Optimization Across Strategies

The tokenized-looper doesn't operate alone. It's one of several strategies inside a Yearn V3 vault, and the vault itself runs a continuous optimization loop to maximize aggregate yield across all of them. This is the core idea behind Yearn vaults: a vault continuously shifts capital across a set of strategies in order to find the highest yield opportunities for depositors.

The offchain optimizer

Yearn's Debt Allocation Optimizer (DOA) is a Python system that runs offchain to calculate ideal allocations. It checks APR data for each strategy and determines the optimal allocation for total vault yield. The results are written onchain via setStrategyDebtRatio() on the DebtAllocator contract, which stores the target allocation for each strategy.

The keeper moves the money

Yearn's keeper system runs continuously. When the DebtAllocator indicates that a strategy's actual allocation has drifted from its target, the keeper calls update_debt() on the vault to move assets. This is the mechanism that actually moves assets to match the target specified by the debt allocator on a frequent basis.

Multi-layered optimization

This vault-level optimization runs continuously alongside the strategy-level automation described above. The tokenized-looper maximizes yield within its allocated capital. The DOA maximizes yield across all strategies by deciding how much capital each one gets.

What yvUSD Offers Depositors

The tokenized-looper turns a passive deposit into an actively managed leveraged position without any active management from the user. This is a new direction for Yearn, which has often stuck with tried-and-true less complex yield strategies. But leveraged strategies now offer users a host of benefits:

• Simple and efficient leveraging with flashloans

• Rewards that compound with leverage

• Automatic leverage management to avoid drift

• Yield optimization between strategies

The user experience is simple: deposit your USD-pegged stables into yvUSD and watch the yield roll in as the strategy leverages, compounds, and rebalances on your behalf. Let the complexity live in the contracts, not in your manual operations.

See more data about yvUSD and deposit here.

This month, we’re introducing yvUSD, a new Yearn vault product designed to make stablecoin yield simpler and more profitable.

yvUSD is a cross-chain vault for USD-pegged assets like USDC: you deposit once on Ethereum mainnet, receive yvUSD (ERC-4626) shares, and the vault can deploy capital across chains to access a broader set of yield opportunities.

Before yvUSD, DeFi users had to manually bridge their assets across different chains if they wanted the best stablecoin yields, because vaults lived and operated on only one chain. But the new cross-chain yvUSD vault does the heavy lifting to optimize yield across multiple chains.

yvUSD works by keeping the vault on Ethereum mainnet, but strategies can live and deploy capital on any chain. The only requirement is that there existing a bridging solution, like Circle’s CCTP, that meets the sufficient security criteria for Yearn. The goal is simple: access more yield sources on different chains in a simple and automated way.

Why Use yvUSD? The User Benefit

If you’re a user holding stablecoins like USDC, you usually face a tradeoff:

• Stay on one chain and accept the yield opportunities available there

• Or chase yield across chains and protocols, spending extra time and taking on extra operational and bridge complexity

yvUSD is designed to offer a third option:

Deposit once, hold one vault token, and let strategies access yield across multiple chains.

Benefits for users include:

• One entrypoint: a mainnet deposit into a standard ERC-4626 vault.

• Diversified yield sources: strategies can reach into multiple ecosystems, using the same yield optimization that other Yearn vaults rely on.

• Composable shares: yvUSD is an ERC-4626 vault token (shares represent a claim on the vault’s assets).

• Yield boost: Users can choose a delayed redemption option to earn additional yield.

The Standard Model: A Mainnet Vault With Mainnet Strategies

In a typical Yearn vault, deposited assets stay on the same chain as the vault. Strategies may vary (lending, liquidity provisioning, etc.), but accounting, deposits, and withdrawals all happen locally.

This model is clean and predictable: withdrawals are usually “atomic” in the sense that capital is already on the correct chain and can be redeemed immediately (subject to any strategy-specific constraints). And depositors only need to trust a single chain, with no bridging risks.

The yvUSD Model: One Mainnet Vault, Cross-Chain Deployment

yvUSD keeps the familiar Yearn vault interface, but expands where strategies can live. Users deposit USD-pegged stablecoins into a mainnet vault and receive yvUSD shares (ERC-4626). From there, Yearn strategies can deploy capital wherever the best risk-adjusted yield is available, including other chains.

At a high level:

1. Users deposit USD assets on Ethereum mainnet and receive yvUSD shares.

2. The vault allocates capital to strategies.

3. Some strategies can bridge capital cross-chain (e.g., via CCTP) and deploy it into yield sources on the destination chain.

4. Strategy accounting is reported back so the vault can compute the aggregate value of assets backing yvUSD.

What Makes yvUSD Unique vs Other Yearn Vaults

1) Cross-chain strategies

The defining technical feature of yvUSD is that it can deploy USD-pegged stablecoins cross-chain. Instead of running a full Yearn vault stack on every chain, the system maintains only a single vault on mainnet and relies bridges to move assets to strategies deployed on other chains. This pattern reduces the operational overhead of capturing new yield opportunities on other chains.

2) Withdrawals can be less “atomic”

Cross-chain deployment has a real user-facing implication: not all assets can be withdrawn from the vault without delay. That means, at any given moment, not all assets backing the vault are guaranteed to be sitting idle on mainnet ready for immediate withdrawal. Users willing to take on duration risk can lock their yvUSD and earn boosted yield in exchange for a withdrawal delay.

Non-atomic withdrawals are not unique to yvUSD (many yield systems have liquidity constraints), but the delay in cross-chain bridging makes the question of where capital is located at any given moment more important.

3) Locked yvUSD

yvUSD introduces a companion vault: Locked yvUSD.

Locked yvUSD wraps yvUSD shares and enforces a cooldown period followed by a withdrawal window. This is an opt-in product for users who can commit to delayed withdrawals, in exchange for an additional yield component (a “locker bonus”) sourced from the vault’s fee mechanics.

In the current implementation, the defaults are:

• Cooldown duration: 14 days

• Withdrawal window: 7 days

New Risks

yvUSD adds new capabilities, but that also means new risks. The major risk categories to understand for yvUSD are:

• Smart contract risk (vaults, strategies, integrations)

• Stablecoin risk (depegs, issuer/custody risk, liquidity)

• Cross-chain risk (bridge mechanics, message relay, remote execution/accounting)

• Leverage/liquidation risk (if leveraged strategies are included in the vault)

Learn More

• Yearn yvUSD overview docs

• yvUSD developer deep dives

• Onchain contract addresses

yvUSD is Yearn's newest vault product. A cross chain, cross asset, delta neutral stable coin vault meant to do what Yearn was always supposed to do, "Make DeFi simple".

I know what you're thinking, "Wow that's so original, how did you come up with that idea?"

For years people have been asking for this product from Yearn, but there was always hesitation around it.

Yearn was born out of the madness of early DeFi summer. When bridges got hacked more often than Trump picks off world leaders. When USDC and USDT had more peg issues than a gay pride parade. And when simply depositing into the newest food flavored Compound fork paid double digit yields.

But the reality is we no longer live in that world.

Although the available yield sources are getting more efficient and viable, they also come with increased complexity and unique risk. And all that means more foot guns for normal users to Dick Cheney themselves with.

So, while Yearn continuously debated the merits and risks, plenty of other protocols stepped in to fill the need in the market themselves. Unfortunately, many of these products ended up just being some combination of black box, off chain, wanna be hedge fund, EOA managed, degenerately recursive cluster fucks.

big breath in

I personally learned many things from the Stream saga, but perhaps most importantly it became clear there is not only a place, but a NEED in the market for something that users could get the same benefits from, but actually be able to see, verify and trust through code.

So here we are, yvUSD is NOT a stable coin, it is a vault. It takes on risk, including duration, liquidity, bridge, leverage etc. The vault plugs in to PT's, Leverage Loops, RWA's, L2's, points and all the other catchy buzz words that get the Degen's goin. BUT, as with any Yearn product, every cent down to the last Wei can be verified and accounted for fully on chain by anyone, anywhere and at anytime. The same security practices that have made our vaults the highest caliber on the market over the past years is maintained. Risk is taken but managed, and the returns are intended to be a reflection of that.

How do?

yvUSD is built on the highly battle tested and trusted Yearn V3 code. The same code that has secured hundreds of millions in our own TVL, as well as many other high tier DeFi protocols that have used it for their own vaults such as Curve, Cap, Term and SuperForm V1.

The strategies are actually written in code (imagine that), the bridging is done through native bridges such as CCTP to reduce any external risks and duration is managed through Locked yvUSD.

Locked yvUSD allows users to opt in to "locking" (get it?) their yvUSD in return for boosted yield. When a user locks they are subject to a "cooldown" period (currently 14 days) that they will need to wait before being able to withdraw.

Having a smart contract enforced duration period means the vault allocations can be more effectively matched to the actual needs of depositors. This allows it to remain liquid for those that want liquidity, but also deploy into higher yielding strategies with the rest, and therefore getting better returns for all.

(Yes we did steal this idea from Infinifi, but I already told them so you get no points for figuring it out)

The vault will keep a buffer in high quality, very liquid mainnet strategies, such as sUSDS, to service atomic withdraws at any time for those that need it, just like our other vaults. The liquid mainnet strategies will be continuously allocated using Yearn's debt optimizer to keep earning the highest yield while maintaining full availability.

The rest of the vault will be allocated to a varying degree of higher duration or risk strategies both on mainnet or other chains. This includes PT's, leverage loops, PT leverage loops, RWA's etc. on both mainnet and abroad. On launch we support all CCTP chains but will continue to add more with native bridge options such as Katana through the Polygon zkEVM bridge soon as well.

For a full view of the vaults current assets across strategies and chains you can view the Debank Bundle here

https://debank.com/bundles/221066/portfolio

Why Come?

As someone who has spent the past years overly obsessing about DeFi vaults, its quite strange to see the new meta so aggressively switch in that direction. Yearn created the first vaults long before I showed up and will still be cranking them out long after most of these new projects have dried up.

But not all vaults are created equal, and not all operators are either.

If you, like me, are one of the (hopefully many) DeFi users who are put off by the current state of the markets offerings; very low yields from the boring places like Aave, Morpho, and Yearn (yikes) on one hand, or black boxes with higher yields on the other, this vault may just be for you.

This is the anti black box.

No attestations needed, because you can watch the flow of funds in, out, and through since it's all onchain and enforced by code.

No "external fund managers" to lose your money, you can verify what any of the strategies can and cannot do at any time.

No manual PPS updates, you can see and track the accounting on chain as it grows in real time.

yvUSD is the DeFi native yield coin, and how farming is meant to be done.

For a long time Yearn has had too many vaults and not enough yield. It's time to change that.

Yearn Vault

Earn yield on your crypto with Yearn's automated vault strategies

https://yearn.fi

LOADING.... yvBTC

Yearn has done the hard, messy work of growing up. It has cut costs, re-grown TVL, and proven it can govern itself through a long bear. Over these last years, contributors have shown fiscal discipline and deep resilience. We have come out stronger, more focused, cohesive, and ready to build with momentum.

As Yearn steps into operating adulthood, three new threads weave into one coherent system:

• A simplified token model (stYFI) that routes protocol revenue to aligned YFI stakers and secures governance without four-year locks.

• An operating model centered on autonomous, revenue-focused teams with on-chain P&L.

• A modern incentive system that aligns contributors and ecosystem actors, and sets the stage for continued growth.

Design principles

• Simplicity first; security always. Minimal contract surface; modular upgrades.

• On-chain by default. Revenue, budgets, and distributions settle transparently on-chain.

• Autonomy with accountability. Teams own strategy, execution, and P&L.

• Adaptability. Governance sets dials; the system adapts.

Dive into the Details

How Governance Changes (stYFI)

stYFI makes governance simpler: stake YFI once to earn a share of forward protocol revenue and voting power with no more four‑year locks.

For participants, the experience is one clear loop: stake → vote → earn → exit.

• Stake: Stake YFI to mint stYFI 1:1. From that moment, your governance weight ramps from 0 → 100% over a security window of ω_weight weeks..

• Vote: stYFI is Yearn’s governance token. Voting runs in epochs at least as long as the unstake cooldown (≥ τ_cooldown), so only those staked across a decision window can decide.

• Earn: A ρ_stakers% share of forward protocol revenue flows to stakers. All incoming revenues are permissionlessly converted into A_reward tokens using existing auction mechanics.

• Exit: When you unstake, you enter a τ_cooldown period. During the cooldown you can’t vote or earn, and your YFI becomes linearly claimable until the window ends and the entire position can be claimed.

The rest of the system is similarly streamlined:

• dYFI gauges are shut down. Rewards have ended, but dYFI can still be claimed. Liquidity may thin, but the redemption contract remains open (using ETH to claim).

• Liquid lockers stop accepting deposits. Locks begin to decay. A redemption facility provides two-way conversions between YFI and locker YFI, with a decaying fee (Λ_redemption) over four years. Unused capacity and fees return to the treasury at program end.

The goal of these changes is to radically simplify how YFI is used in governance and to provide real value to governance participants.

Info for veYFI holders

Current veYFI locks are migrated automatically. A snapshot captures all existing locks. For the life of each snapshot lock, its underlying YFI behaves as if staked in stYFI — earning revenue and full voting weight with no user action. When a lock expires (or is unlocked early), its stYFI power drops to zero. Holders then withdraw and restake into stYFI to continue participating.

There’s also an opt-in reward multiplier for existing governance participants: 4-year locks get 2× rewards, decaying linearly to 1× by expiry. Shorter locks get a proportional boost of 2 * lock-weeks-remaining / 52-weeks. Both veYFI and liquid-locker holders can opt in.

Team Restructuring

Yearn’s product teams are evolving to be autonomous, outcome-focused, and measurable on-chain. You’ll be able to query a team’s P&L like you query a vault’s balance.

Work is organized around these autonomous, revenue-driven teams. Each owns product, contracts, risk, and go-to-market. They will form from today’s contributors, around existing product lines. A minimal DAO-ops team will handle shared rails only — governance, treasury mechanics, budget plumbing, and on-chain reporting.

Funds flow visibly and verifiably. Every team routes income to mainnet revenue splitter contracts that send ρ_stakers% of revenue to stYFI, with the remainder to the treasury.

New Incentives

Incentives align contributor ownership and execution. Key contributors receive vested YFI retention packages. Revenue-focused teams earn YFI based on profit and growth. A contributor collective permanently stakes and votes.

Treasury YFI (T_total) is allocated across three buckets:

• V_core — key contributor vests.

• R_ll — capacity for the liquid-locker redemption facility (linked to Λ_redemption).

• P_perf — performance bonus reserve (plus leftover R_ll fees and unclaimed amounts).

Individual Contributor Vests

Key Contributor vesting packages are distributed to contributors who have shown long term commitment to Yearn and whose work on the DAO is instrumental to its continued success. Vesting packages are linear and long‑dated with a short cliff. Unvested amounts can be clawed back by yChad if a contributor leaves before completion.

Team Bonus Incentives

Teams earn quarterly YFI bonuses based on net profit — revenue generated minus budget used. Rewards scale dynamically with protocol growth:

total_profit = revenue - treasury_cost
bonus_yfi_price = TWAP_YFI(Ξ_oracle) × (1 − clamp(revenue_growth, −γ_growth_cap, +γ_growth_cap))
bonus_yfi = total_profit / bonus_yfi_price

When aggregate revenue growth slows, YFI is “expensive,” so bonuses shrink. When growth accelerates, YFI is “cheap”, amplifying rewards for profitable teams.

This keeps the focus on durable, compounding revenue while syncing incentives to protocol health.

Yearn Builder's Collective (YBC)

Each team’s YFI bonus splits two ways: a team share and a retention share that seeds the Yearn Builder’s Collective. The ratio is set by θ_bonus_split.

The YBC is a pool of permanently staked stYFI whose yield goes to whitelisted contributors, proportional to their public stYFI positions. This is real skin in the game. The whitelist begins with current contributors and yChad signers, bootstrapped with initial YFI deposits.

The pool’s voting power mirrors those weights. Members govern the whitelist, and can expel bad-faith actors by qualified super-majority.

Conclusion

Together, the result of these changes is a new Yearn that embraces a flywheel of revenue and growth, welcomes more participation without losing its edge, and rewards those who are most committed to it.

Same DNA, but with a sharper design; Disciplined, transparent, ready to grow. We’ve proven we can survive. Now it’s time to auto-compound.

Read the full specification: Part 1, Part 2, Part 3.

Addendum

Tunable parameters (set by governance at deployment)

• ρ_stakers — share of forward protocol revenue routed to stYFI stakers (remainder to treasury).

• A_reward — the single reward asset/vault used to pay stYFI (e.g., yvUSDC).

• τ_cooldown — unstake cooldown duration for stYFI.

• ω_weight — time to full governance weight after staking.

• β = {tiers, multipliers} — optional participation/“voter APR” boost schedule and thresholds.

• κ_budget_epoch — maximum duration for team budget approvals/streams.

• σ_split_tokens — allow-list of revenue tokens accepted by splitters.

• Φ_fasttrack — size/governance of the discretionary/fast-track fund and refill rules.

• γ_growth_cap — bound on revenue growth used in the team-bonus pricing formula.

• θ_bonus_split — default split of any team bonus between the team and the contributor pool.

• Λ_redemption — parameters for the liquid-locker redemption facility (cap, fee start/end, decay period).

• Ξ_oracle — oracle/TWAP window for pricing YFI in formulas.

• E_transition — end of the current epoch when the new structure becomes the funding gate.

• Claims will be available through the new claim page on the yCRV website.

• Eligible positions include YBS and yvyCRV (primary yield-bearing positions). LP positions are excluded.

• Distributions will be pro-rata according to user positions size, while excluding users with receipts of less than a pre-determined dust threshold (currently $10). All dust is reallocated to qualifying users.

• Claims expire after 12 months. After expiry, any forfeited claim value will be routed as regular yield to benefit all YBS/yvyCRV users.

• The yCRV snapshot block will best-effort align with the block height of the parent airdrop.

• Integrators receiving allocations to contracts that cannot claim may open a ticket in Discord for assistance.

• Yearn Boosted Staker for yCRV will be deployed this Thursday, June 6th at 00:00 UTC.

• For those who wish to migrate, the optimal migration period lasts for one full week beginning this Thursday, June 6th at 00:00 UTC, and ending Wednesday, June 13th at 23:59 UTC.

• The following two options are available for earning yield in the new system.

  1. Stay in st-yCRV to auto-compound YBS yield back into more yCRV. No action required.

  2. Stake into the new Yearn Boosted Staker (YBS) to earn yield as stablecoins (yield-bearing crvUSD).

• The choice of which option to use is entirely up to each user's preference. Read on below for helpful information on both.

• Like any Yearn vault, this option is straight-forward and entirely passive. Simply deposit into the vault, and allow the strategy to earn and compound yield for you.

• Behind the scenes, this vault/strategy is farming the same YBS staker that direct-stakers are farming.

• This option is best for users who:

  • Want to grow their yCRV position

  • Are gas cost sensitive (Yearn subsidizes gas to perform farming and compounding activities)

• The new YearnBoostedStaker (YBS) staking system is designed to incentivize long-term stakers by granting them higher rewards. More information about the innovative mechanics can be found in the docs.

• This option is best for users who:

  • Want to earn rewards in stablecoins

  • Don't mind extra gas costs associated with staking and claiming

  • Expect to be long-term ecosystem participants (allowing them to beat the prevailing market reward rate)

• Rewards are issued as yield-bearing Yearn vault wrapped stablecoins, yvcrvUSD-2.

• Users can claim rewards at any time. Claims are never lost if no claim is made.

• For security purposes, the rewards contract is designed to ignore staked amounts in their first week. I.e. Amounts that that have not yet reached a level of 1x boost.

  • As a result, after launch, no users will have the minimum 1x boost required for rewards claim eligibility until June 20th.

• The rewards that have been accumulating for 2 weeks will become claimable at that time to users who migrated during migration week (before Thursday June 13th at 00:00 UTC).

• Note: Users who migrated after the migration period will miss out on this week of double rewards.

• Alice, Bob and Charlie each have 10,000 yCRV

Week 0: Migration Week (No Rewards)

• June 6th: Migration week begins

• June 7th: Alice withdraws her 10,000 yCRV from st-yCRV and stakes it in the new YBS contract, and starts with a 0x boost.

• June 10th: Bob withdraws his 10,000 yCRV from st-yCRV and stakes it in the new YBS contract, and starts with a 0x boost.

Week 1: Double Rewards Week

• June 13th: A new week begins - Alice and Bob's yCRV moves up to 1x boost

• June 14th: Charlie buys 10,000 yCRV and stakes it in the new YBS contract, and starts with a 0x boost.

Week 2: Standard Rewards Week

• June 20th: A new week begins and the double rewards (let's assume 2,000 yvcrvUSD) from the previous week are now claimable - Alice and Bob now have a 1.5x boost, Charlie has a 1x boost.

• June 21st: Alice and Bob each claim 1,000 yvcrvUSD rewards (from their 10,000 staked yCRV at 1x boost during the previous week) but Charlie has nothing to claim as his stake has not yet experienced the minimum 1x boost needed to earn rewards.

Week 3: Standard Rewards Week

• June 27th: A new week begins and the standard rewards (1,000 yvcrvUSD) from the previous week are now claimable - Alice and Bob now have a 2x boost, Charlie has a 1.5x boost

• June 27th: Alice and Bob both claim 375 yvcrvUSD rewards (from their 10,000 staked yCRV at 1.5x boost during the previous week) and Charlie claims 250 yvcrvUSD rewards (as he was on 1x boost in the previous week)

State On May 1st

• yvAjnaDAI had two strategies lending DAI to st-ycrv

  • Capital at risk: 399k DAI + 300k DAI

• Both strategies were lending at 0.34051 per st-ycrv and market value was 0.6787

  • Based on market price, lending at a ~50% LTV

  • Originally, lending started at 20% LTV

• Pool borrowing was at 29.25% increasing 10% every 12hs

• Two of the biggest borrowers 0x0059efca9d24bf579ee0314e7bc2569674aa42e2, 0x286ee152779ca230a30337d3f96df7963e41a307 levered up.

• There was 667k CRV in the curve ycrv/crv pool

• Lowest health rate borrower had 861_239.55 st-ycrv as collateral and 258_117.99 DAI debt

• Bond to kick borrower 2_565.99 DAI

Concerns

If liquidation happens it might

• Wipe the ycrv/crv pool

• It would sell around 1.3M CRV for DAI

• It might tank the price of ycrv, causing other positions to go under

• No market participation in the liquidation auction

• No mev bots participating in the auction because of no direct pool liquidity for st-ycrv

Options Explored Without Success

• Tried contacting the borrower

• Kept increasing the borrowing rate to force repayment

• Simulated how long it would take for the user position to go below 1 on health ratio. It would have happened on GMT: Thursday, May 30, 2024 3:09:49 PM.

Decision Made

On May 2nd, we started a war room to liquidate the position.

• Treasury allocated 500k DAI to baseline the auction

• Treasury would participate in the auction with 100k collateral chunks and will start bidding when auction reaches below market price

• st-ycrv strategy reward trading was halted to allow OTC with treasury

• Bond price would be paid by vault liquidity

LOG

LenderKick Action

You can see in this transaction how capital was added to the strategy to pay for the lenderKick bond:

https://etherscan.io/tx/0x6c6127da0f97d925c19b6d68b92996f7719986b36d82773de460759148edb908

Another Borrower Repaid Their Debt

After the liquidation started, another borrower repaid their loan:

https://etherscan.io/tx/0xec8e91ddc860744da95020457f7368951fe63d6a79b32c7c48a52bf5f92f66c1

Takes

Take is the process of taking collateral and giving the pool quote token. In this case is taking st-ycrv and sending DAI.

Take #1: Not yearn

https://etherscan.io/tx/0x49265d13f3eab77d4031f632f87bed9f64368b45a3165934c6e7e70fa6e55054

Take #2: Yearn took 2nd

https://etherscan.io/tx/0xd007d04560fc42df93da0fd25ac3942f89f7f5458eb492872b3d87be91d7a571

Take #3: Not yearn

https://etherscan.io/tx/0x58d1793708e2846b0bdf9eeff5fe386bc46dec80ae2f3463817dd53b84da3203

Take #4: Yearn took 4th

https://etherscan.io/tx/0x579056f777c1f05a18e566dd329ea85f5c747fd6e7246411b5e016c8bebe8742

Take #5: Not yearn

https://etherscan.io/tx/0x171472cfe3285d8d6c011a61ee0d74bb1da299bb839ac23af7f40e26f03a8647

Take #6: Yearn took 6th

https://etherscan.io/tx/0x83cb858d746d4ed3c6b39a56386b2b63476300bb211eeba451b921d7e2eb9381

Take #7: Not Yearn

https://etherscan.io/tx/0x87850cabdf9b0817db89ecb6b848b33bada213466d9ea53e4cc0f16ede733115

Take #8: Yearn took 8th

https://etherscan.io/tx/0x94e1a85fa25e433976962449588e522ce0f2a81ae3d4b67ae199e458dfce4e39

Strategy Withdraw

https://etherscan.io/tx/0x4d14880ede8cefa9421f938e69f93b7a728f339c03a237922ce23978007e9000

Strategy withdrew all funds and reported a 2_781.66 profit. This number is, profit from the interest generated minus the bond price.

st-ycrv OTC with treasury

You can check the sender address for more details but important part is:

https://etherscan.io/tx/0xcb000dd2b623f9924fe0234831800950a3269b2d412ce9eeabb0ec65cd737059

Keeper harvested seconds afterwards in

https://etherscan.io/tx/0xf79a1e3adf8dc6e6e6bb62ad00d910271e576286f33effc313195828aecc1419

Conclusion

Liquidated party ended up with 348k st-ycrv.

Yearn strategy withdrew from the ajna pool with profit.

Yearn treasury ended up using 141_086.76 DAI from the 500k allocated.

275_627.5 st-ycrv were bought and OTC with the st-ycrv strategy.

• The current yPRISMA staking contract will be deprecated this Thursday May 16th at 00:00 UTC.

• To continue earning staking yield, all yPRISMA stakers are required to migrate.

• The optimal migration period lasts for one full week beginning this Thursday May 16th at 00:00 UTC

• Users who migrate during this period will not lose any yield.

• The following two migration options are available.

  1. Deposit into the new yPRISMA Yearn vault (yvyPRISMA)

  2. Direct-stake into the new Yearn Boosted Staker (YBS)

• The choice of which option to use is entirely up to each user's preference. Read on below for helpful information on both.

• Like any Yearn vault, this option is straight-forward and entirely passive. Simply deposit into the vault, and allow the strategy to earn and compound yield for you.

• Behind the scenes, this vault/strategy is farming the same YBS staker that direct-stakers are farming.

• This option is best for users who:

  • Want to grow their yPRISMA position

  • Are gas cost sensitive (Yearn subsidizes gas to perform farming and compounding activies)

• The new YearnBoostedStaker (YBS) staking system is designed to incentivize long-term stakers by granting them higher rewards. More information about the innovative mechanics can be found in the docs.

• This option is best for users who:

  • Want to earn rewards in stablecoins

  • Don't mind extra gas costs associated with staking and claiming

  • Expect to be long-term ecosystem participants (allowing them to beat the prevailing market reward rate)

• Rewards are issued as Yearn vault wrapped stablecoins, yvmkUSD-A.

• For direct stakers, rewards are no longer "streaming". Instead, rewards will be "trailing", meaning past week's rewards will become claimable as a lump sum at the start of the following week.

• Users can claim rewards at any time. Claims are never lost if no claim is made.

• For security purposes, the rewards contract is designed to ignore staked amounts in their first week. I.e. Amounts that that have not yet reached a level of 1x boost.

  • As a result, after launch, no users will have the minimum 1x boost required for rewards claim eligibility until May 23rd.

• The rewards that have been accumulating for 2 weeks will become claimable at that time to users who migrated during migration week (before Thursday May 23rd at 00:00 UTC).

• Note: Users who migrated after the migration period will miss out on this week of double rewards.

• Alice, Bob and Charlie each have 100,000 yPRISMA staked in the old contract

Week 0: Migration Week (No Rewards)

• May 16th: Migration week begins, rewards stop streaming to the old contract

• May 17th: Alice unstakes her 100,000 yPRISMA and stakes it in the new YBS contract, and starts with a 0x boost.

• May 22nd: Bob unstakes his 100,000 yPRISMA and stakes it in the new YBS contract, and starts with a 0x boost.

Week 1: Double Rewards Week

• May 23rd: A new week begins - Alice and Bob's yPRISMA moves up to 1x boost

• May 24th: Charlie buys 100,000 yPRISMA and stakes it in the new YBS contract, and starts with a 0x boost.

Week 2: Standard Rewards Week

• A new week begins and the double rewards (4,000 yvmkUSD) from the previous week are now claimable - Alice and Bob now have a 1.5x boost, Charlie has a 1x boost

• May 31st: Alice and Bob both claim 2,000 yvmkUSD rewards (from their 100,000 staked yPRISMA at 1x boost during the previous week) but Charlie has nothing to claim as his stake has not yet experienced the minimum 1x boost needed to earn rewards.

Week 3: Standard Rewards Week

• June 6th: A new week begins and the standard rewards (2,000 yvmkUSD) from the previous week are now claimable - Alice and Bob now have a 2x boost, Charlie has a 1.5x boost

• June 7th: Alice and Bob both claim 750 yvmkUSD rewards (from their 100,000 staked yPRISMA at 1x boost during the previous week) and Charlie claims 500 yvmkUSD rewards (as he was on 1x boost in the previous week)

While some of us have been caught up in the frenzy of the latest memecoin meta, Yearn developers have been obsessing about the auction meta, drawing inspiration from the design of Ajna, a permissionless and oracle-free lending protocol. Their focus has been on how Dutch auctions can enhance and automate Yearn's backend processes. This resulted in a new Auction primitive that the Yearn suite of contracts will be increasingly using, and this article unpacks the details.

We'll begin by discussing the initial auction use cases, proceed to explain how the auctions work, and conclude with how you, the opportunistic anon, can profit.

Yearn's V3 vaults feature notable enhancements such as Tokenized Strategies, Smart Modules, and an improved system for deploying compounding strategies for any token.

The core mechanism remains: An asset token is deposited into a Yearn vault, which then farms yield through various strategies, receiving a reward token, that is compounded into more asset.

However, the compounding step, converting yield into the underlying asset, has always been a challenge. Initially managed through permissionless function calls, the rise of MEV necessitated a shift to various keeper networks. Is there a better solution?

How can we efficiently exchange reward tokens for asset tokens on-chain in a permissionless fashion?

Through veYFI farming, Yearn vault depositors earn "Discount YFI" (dYFI) tokens. These tokens are redeemable 1:1 for YFI at a discount, depending on the total veYFI locked. Users pay a lower-than-market WETH amount to convert dYFI into actual YFI.

The WETH collected from redemptions is used to buy back more YFI for future dYFI redemptions.

What's the optimal method to trade WETH for YFI on-chain?

The Yearn treasury earns fees in various tokens from the suite of Yearn protocols. These need to be sold into specific assets for long term holding or to cover operational expenses.

How can the management of the treasury balance sheet be automated?

Yearn contributors are lazy animals, avoiding manual labor and seeking automation wherever possible. We favor systems that require minimal intervention and operate independently. Risk minimization is key; we aim to avoid reliance on potentially unreliable external data sources like price oracles. We like simple things. To give superior yield to users, we favor designs that can be efficient and resistant to MEV leakage.

1. Each asset, has a dedicated auction contract. Many different sell tokens can be offered through distinct auctions through this contract, receiving the same asset in return. In other words, "Sell DAI for YFI" and "Sell WETH for YFI" can both supported through the same contract with YFI as the asset, but any one auction will only sell either DAI or WETH, never both.

2. Tokens for sale accumulate either in their respective auction contracts directly, or in the contracts that rely on the auctions (and get transferred to the auction contract at the start of the auction).

3. An auction can be initiated either once a sufficient sell amount accumulates, or upon a manual kick() call that is permissionless.

4. Auctions can last up to 24 hours and occur no more than once within some configurable interval, like weekly.

5. The initial price is set high and decreases with time, halving every hour.

6. Takers can take() the sell token on offer at the current price, providing asset to the contract in return.

7. The auction concludes once all sell in the batch is sold or 24 hours elapse.

8. Unsold sell carries over to the subsequent auction.

Engage as a Taker to potentially profit through arbitrage or to acquire tokens at favorable prices, contributing to Yearn's ecosystem.

Watch for AuctionEnabled() events to identify active contracts, and AuctionKicked() to note auction commencements.

Our first Auction contracts sell WETH for YFI and [USDC, STURDY] for WETH, with more to follow shortly. Keep an eye out for contracts created by the v3 AuctionFactory.

For further details, consult the API documentation or join us in the Auctions Secret Admirers group on Telegram if you have questions.