Question 1

What is Yeti Finance?

Accepted Answer

Yeti Finance is a decentralised lending protocol built on the Avalanche blockchain. It enables users to borrow against a portfolio of assets, including LP tokens, staked assets like sJOE and sAVAX, and yield-bearing stablecoins. The protocol allows users to consolidate these assets into a single debt position while continuing to earn rewards from their collateral.

Yeti Finance is known for its highly capital-efficient system, offering low minimum collateral ratios (as low as 105%). It leverages advanced risk mechanisms, auto-compounding features, and a robust redemption system to ensure the protocol’s stability. Inspired by protocols like Liquity and Abracadabra, Yeti Finance combines key elements of both while introducing portfolio borrowing and other innovations.

Question 2

What is YUSD?

Accepted Answer

YUSD is the native stablecoin of Yeti Finance, designed to maintain a strong peg to 1 USD. It is an overcollateralised stablecoin backed by a variety of digital assets deposited into the protocol. YUSD can be minted when users open a “Trove” on Yeti Finance, securing their assets as collateral.

The protocol maintains YUSD’s peg through arbitrage mechanisms, allowing YUSD to be redeemed for $1 of collateral at any time. Additionally, features like a Peg Stability Module (PSM) and fees for minting or redeeming YUSD help regulate its supply and demand, ensuring price stability even during market volatility.

Question 3

What is YUSD used for?

Accepted Answer

YUSD serves several purposes within the Yeti Finance ecosystem:
- **Borrowing and Liquidity**: Users can borrow YUSD against their collateral and use it for trading, reinvesting, or staking within DeFi protocols.  
- **Peg Stability Module (PSM)**: YUSD can be swapped 1:1 with USDC, ensuring its peg to the US dollar.  
- **Stability Pool**: Users can deposit YUSD into the Stability Pool, which offsets liquidations within the protocol. Stability Pool depositors earn rewards in the form of liquidated collateral and farming incentives.

As a stablecoin, YUSD also acts as a reliable medium of exchange and store of value within the broader DeFi ecosystem.

Question 4

Who created YUSD and Yeti Finance?

Accepted Answer

Yeti Finance was developed by Sapiens Research, a team of developers and economic modellers with expertise in decentralised finance. The protocol’s mechanisms and security have undergone rigorous audits by reputable firms such as Dedaub, Three Sigma Labs, and Haechi Labs. Additionally, a $100,000 bug bounty was hosted via Code Arena to ensure the robustness of the platform’s smart contracts.

The Yeti Finance team collaborated with economic modellers from 3σ Labs to design and validate its risk mechanisms and overcollateralisation models. While Yeti Finance aims for decentralised governance in the future, its current model is managed by the team to ensure a secure and smooth launch.

***Although 'YUSD' was the ticker assigned at the deployment of the YUSD Stablecoin Token's smart contract, it is already in use by another asset that has a larger market presence and higher trading volume on major exchanges. Due to this pre-existing association and to avoid confusion in the marketplace, the alternative ticker 'YETIUSD' has been adopted for this token. This designation is specifically used to ensure that assets are distinctly identified.***