YO Labs, the event group behind YO Protocol, has raised $10 million in a Sequence A spherical to develop its crypto yield optimization platform.
Enterprise capital agency Basis Capital led the spherical, joined by Coinbase Ventures, Scribble Ventures, and Launchpad Capital.
The San Francisco-based firm plans to make use of the funding to convey its yield optimization protocol to extra blockchains and enhance its infrastructure.
YO Protocol is designed to assist customers earn yield on crypto property by routinely rebalancing capital throughout a number of decentralized finance (DeFi) protocols whereas factoring in threat. It at present provides customers entry to USD, EUR, BTC, and gold-based yield merchandise.
Not like most DeFi yield aggregators that function inside a single blockchain, YO’s system works throughout chains. Its vaults — yoETH, yoUSD, yoBTC, yoEUR, and yoGOLD — dynamically allocate capital to wherever the risk-adjusted yield is most favorable, in line with a press launch shared with CoinDesk.
That is powered by Exponential.fi, a platform constructed by the identical group to assign clear threat scores to DeFi protocols. The protocol’s core innovation lies in its calculation of “Danger Adjusted Yield,” a metric derived from the group’s background in constructing threat scores for DeFi swimming pools, the protocol’s co-founder and CIO, Mehdi Lebbar, instructed CoinDesk in an interview.
Slightly than chasing the best marketed percentages, the system calculates a chance of default based mostly on hundreds of threat vectors, which vary from a protocol’s age to its code audit historical past.
To mitigate the safety vulnerabilities usually related to shifting property between blockchains, YO Labs employs a novel structure that minimizes reliance on bridges, Lebbar mentioned. As a substitute of continually shifting funds throughout chains, the protocol establishes what the group describes as “embassies” —impartial vaults holding native property on every blockchain.
“If you happen to bridge a pool, you will have publicity to the danger of the bridge… We would have liked to create these ’embassies’ throughout a number of planets, these vaults throughout a number of chains that maintain native property,” Lebbar mentioned. “When you have USDC on Arbitrum, that’s the identical USDC as on Ethereum, and also you not have the bridge within the center… that is a lot safer.”
Past structure, the system employs a ‘DeFi Graph’ to handle energetic dangers throughout market volatility or protocol failures—what Lebbar calls ‘Armageddon eventualities.’ This technique displays dependencies as much as 5 ranges deep, permitting the protocol to set off automated withdrawals if a pool is not directly uncovered to a failing asset, Lebbar mentioned.
The funding spherical brings YO Labs’ complete raised to $24 million, together with a earlier seed spherical led by Paradigm. With the brand new capital, the corporate is positioning YO as core infrastructure for fintechs, wallets, and builders seeking to embed sustainable yield into their merchandise.