DeFi has grown large enough to offer everything a traditional finance firm could offer in the last few years. The DeFi borrowing protocol is the recent addition to this list and brings tonnes of benefits one can only seem of in TradFi. Yet is one such borrowing protocol built in the Avalanche ecosystem and went live on April 16. This much-awaited protocol, to everyone’s surprise, or not, managed to cross $500 million in just 24 hours after the launch. But why is DeFi excited about the arrival of this little startup?
Yeti is a next-gen borrowing protocol that lets you borrow more than 20x against your portfolio for absolutely no interest. It makes the protocols one of the best options for yield farming and deposit incentives. But most interestingly, the protocol lets the users even collateralize assets that have not been available in the ecosystem before. You can get deep liquidities, borrow at the lowest liquidity ratios, and many such features to protect your assets from liquidations.
Users are instructed to deposit their collateral into ‘troves’ of Yeti. These troves help users mint YUSD, the native stable coin of Yeti. The minted stablecoins are used for receiving rewards from a stable pool of Yeti or exchanged for other cryptocurrencies on Curve. The coin uses hard-peg mechanisms, decentralization, and liquidity incentives. It has accumulated over $300,000 liquidity on Curve and is the second-largest liquid stablecoin on Avalanche, next only to av3CRV.
According to OxTalent, the co-founder of Yeti Finance, the project chose to build on Avalanche because of scalability, innovation, and security. Moreover, Avalanche is one of few projects in the market to have a solid positive sentiment. The co-founder also believes that the vision of Yeti Finance and Avalanche are aligning as far as their vision for DeFi’s future is concerned. He added that a powerful and passionate network like Avalanche would help keep Yeti’s relevance in DeFi. Avalanche has also made a strategic investment in Yeti’s borrowing protocol. The Avalanche team believes that Yeti would bring billions of dollars of new and capital-efficient liquidity to the ecosystem.
This nascent borrowing protocol is already integrated with some of the promising DeFi projects on Avalanche. Trader Joe, BENQI, Aave, Curve, and Colony Lab list. Yeti has further plans to integrate protocols like Platypus, which will help borrow against stablecoins like aUST, Benqi’s sAVAX, and GMX assets. Yeti has invested $800,000 in protocol security like smart contract audits, economic reports, and peer reviews. Another strategic security partnership is signed with Three Sigma Labs with a contract for 12-months. Yeti has invested a significant portion in “agent-based simulations of the protocol under different black swans” to fortify solvency.