DeFi has never suffered from a lack of yield opportunities. What it has lacked is a way to capture those yields without turning everyday users into full‑time portfolio managers. YO was designed to fill this gap: an all-in-one system that automates strategy selection and cross-chain allocation, so users can simply hold a token and let the optimiser do the heavy lifting.
For years, participants have been forced to hop between protocols, bridge assets across chains, and watch their expected returns get eroded by fees, slippage, or collapsing APRs. The result is a market where only power users thrive and mainstream adoption lags behind.
The Evolution of Yield Aggregators
The first generation of yield aggregators, popularised by Yearn Finance, was revolutionary during DeFi Summer 2020. By letting users deposit once and earn automatically, Yearn proved that pooled, automated yield had real product market fit. At its peak, TVL across yield optimisers soared to $12b. But the model was narrow and brittle. Vaults were chain-specific, strategy breadth was limited, and a series of high-profile exploits from Harvest to Grim to Badger eroded trust. Users learned the hard way that “set and forget” came with risk.
Gen 2 solutions, such as Tokemak Autopilot and Superform, have expanded the range of strategies and automated rebalancing options. They introduced yield-bearing receipt tokens and smarter allocation logic, making LPing and lending less of a manual chore. But they remained chain local, forcing users to bridge if the best yield lived elsewhere. More recently, DeCeFi protocols like Upshift and Stream opened access to institutional-grade strategies such as market making, delta-neutral positions, and complex structured products, but at the cost of transparency. Users must now trust curators, multisigs, and off-chain market makers.
Each wave solved one part of the puzzle while leaving others open. What DeFi needed was a protocol that combined automation, multichain reach, and on-chain verifiability, a system that made yield as easy as holding a token.
Introducing the YO Protocol
Launched in March 2025, YO is multichain by design, algorithmic in its allocation, and fully verifiable on-chain. TVL has grown to $80m, led by yoETH ($43m), yoUSD ($25m), and yoBTC ($12m). Recently, yoEUR crossed $1m TVL and is now earning ~9% APR with Merkl rewards.
You deposit once, hold a standard ERC-4626 YO token, and you can use it as collateral, LP, or split on Pendle, which accrues yield automatically and can be used across DeFi as collateral, in LP positions, or even split into principal and yield on Pendle. YO sources yield from more than 100 strategies across lending markets, liquidity pools, and yield‑bearing tokens on Ethereum, Base, and Unichain. Around 70% of assets are on Ethereum, 27% on Base, and 3% on Unichain, with top exposures currently Pendle (18.5%), Tokemak (15.6%), and Morpho (15.1%), followed by Aave, Fluid, and IPOR. A curated whitelist and Exponential.fi risk scores give users clear, auditable insight into risk‑adjusted returns.
YO rebalances only when the expected net gain exceeds costs, using sponsored gas efficiently and ensuring that reallocations add value rather than dilute it. Recent rebalancing has increased allocations to targeted opportunities over the last month, further optimising net returns. This process is visible on-chain and allows users to track allocation shifts in real time, reinforcing the protocol’s emphasis on transparency and control.
Performance highlights:
- yoUSD has delivered 8.64% annualised since inception with near‑zero volatility and no negative months, outperforming the 3‑month Treasury bill benchmark by 4.64%.
- yoETH has returned 5.33% annualised, outpacing liquid staking benchmarks with volatility held to 0.24%.
- yoBTC systematically generates yield on Bitcoin, producing steady positive returns with shallow drawdowns.
A Foundational Yield Layer
YO functions as a yield layer for DeFi. Its ERC‑4626 tokens are plug‑and‑play across protocols: nearly half of yoETH supply is already deployed in Pendle, Euler, and Morpho markets, and more than a quarter of yoUSD supply is used as lending or LP collateral.
Morpho integrations now allow users to loop yoETH and yoUSD positions directly, either through Morpho’s native interface or via Contango’s looping markets, which package borrowing and re‑supply into a single transaction. Improved Morpho reactor liquidity has lowered borrow rates, making loops cheaper and safer for users. This opens the door to capital‑efficient leveraged strategies that compound both yield and YO points exposure.
Beyond Morpho, YO is integrated with roughly 40 wallets, dapps, and infrastructure providers, making access to vaults nearly ubiquitous across the DeFi stack. YoGateway provides projects with a straightforward way to integrate YO vaults, enabling partners to offer their users optimised yield as a native feature without building their own strategy engines.
Routing is handled through aggregation platforms like Enso, 1inch, and Cow Swap for optimal execution, while wallet integrations with Coinbase Wallet, SafePal, and Leap allow deposits through familiar interfaces. APIs and dashboards such as Zerion and yield.xyz surface YO vault data to end users, creating a feedback loop where vault growth and performance are easily monitored.
What’s Next for YO
The September 2025 launch of yoEUR positions YO ahead of growing European demand for regulated euro stablecoin yield, especially as MiCA’s DeFi provisions come into effect in 2026. The euro‑denominated vault is the first multichain product of its kind and will be able to direct liquidity toward both stablecoin lending and token‑incentivised pools, unlocking efficient euro yield sources.
Capital efficiency is also expanding through looping strategies: users can loop YOUSD through Contango’s automated markets or IPOR’s Fusion UI for leveraged exposure, currently delivering around 24% APY. The roadmap also includes the ability to post principal tokens as collateral and risk-tranched vaults, giving conservative users senior exposure and more risk-tolerant users higher-yield junior exposure. YO is also exploring insurance‑style protections inspired by InfiniFi and Strata.
In parallel, YO is exploring integrations with consumer apps and wallets that would allow users to earn yield simply by holding yoTokens in‑app. In this scenario, DeFi complexity becomes invisible to the end user, while advanced users retain the ability to compose yoTokens into loops, fixed yield positions, or LP strategies.
Risks and Considerations
As with any DeFi protocol, risks include smart‑contract vulnerabilities, failures in integrated protocols, and liquidity crunches. YO mitigates these with audited contracts, curated whitelists, and continuous risk monitoring.
Its governance and security framework is deliberately conservative: YO operates under secure multisig controls with timelocks, runs an active Immunefi bug bounty program, and has undergone multiple audits by Hunter Security, Offbeat, and Spearbit, all with no critical issues found. This institutional‑grade approach reassures depositors that the protocol is actively monitored and hardened against potential threats.
Exponential.fi’s risk ratings add an extra layer of protection by scoring each integrated strategy across dimensions like code quality, governance maturity, counterparty exposure, and historical reliability. These ratings are dynamic, adjusting quickly in response to hacks, oracle failures, or governance changes. This allows YO to exclude or down‑weight risky venues when scores fall, keeping vault exposure within acceptable parameters.
Withdrawals follow a FIFO model with a 5% liquidity buffer to avoid forced liquidations, and on-chain accounting ensures that users can always verify backing. While no system is entirely without risk, YO’s transparency and automated risk controls represent a significant improvement over earlier yield platforms.
The Bottom Line
With YO, you can stop hunting for yield and start using it as a foundational layer. YO allocates across over 100 strategies and rebalances only when the expected net gain beats costs. Your capital is deployed where it earns the best risk-adjusted return, shifting automatically as conditions change.
You can see these allocations move in real time and understand the risk profiles that guide them. As a builder, you get predictable collateral in YO tokens; as a user, you get a yield source that behaves like dependable infrastructure rather than a speculative bet. For DeFi to mature, it needs systems that can be audited, integrated, and scaled. YO is providing that foundation.
Ready to simplify your DeFi experience? Explore the YO vaults to see the strategies in action, or connect your wallet to deposit and start earning automated yield today.