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  • Introduction
  • Underlying Asset
  • Supported Assets
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  1. Technical Docs
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YETH

Introduction

YETH is our premier yield-bearing Ethereum asset, designed to offer users passive income while retaining full exposure to ETH. It serves as an optimal solution for DeFi participants looking to maximize yield without actively managing their holdings.

YETH integrates the ERC4626 standard with a yield vesting mechanism, ensuring a steady and predictable accrual of earnings. The token remains fully backed by Ethereum-based assets while seamlessly incorporating yield, making it ideal for both immediate liquidity and long-term accumulation strategies.

Underlying Asset

YETH’s core asset is WETH (Wrapped Ether), a tokenized version of ETH that ensures broad compatibility across DeFi applications. WETH maintains a direct 1:1 peg with ETH, providing deep liquidity and seamless interaction within Ethereum’s ecosystem. We selected WETH due to its universal adoption and foundational role in DeFi infrastructure.

Supported Assets

In addition to WETH, YETH’s Manager contract supports deposits of various Ethereum-based yield-generating assets, including:

  • stETH (Lido Staked ETH): A liquid staking derivative (LSD) that represents staked ETH with automatic staking reward compounding.

  • rETH (Rocket Pool ETH): A decentralized staking solution offering a non-custodial alternative to Lido.

  • ETHx (Stader ETH): A staking derivative aimed at enhancing decentralization and accessibility within Ethereum’s staking ecosystem.

  • Pendle PT Tokens: Principal tokens that strip out the yield component from underlying ETH assets, enabling fixed-rate returns.

When depositing non-native assets, the process follows a two-step flow:

  1. The user deposits a supported asset (e.g., stETH) via the Manager contract and receives a Receipt NFT as confirmation of their pending deposit.

  2. An off-chain executor then processes the deposit by:

    • Calculating asset to WETH where necessary, based on prevailing exchange rates.

    • Updating the totalAssets in YTokenL1 to reflect the new balance.

    • Minting the corresponding amount of YETH tokens for the user.

Yield Strategies

YETH utilizes a diversified yield-generation framework, emphasizing three core strategies:

  • Yield Trading Protocols - Pendle, Spectra, and Napier:

    • Participation in tokenized yield markets to optimize staking yield.

    • Leveraging structured yield instruments for predictable returns.

  • Staking & Liquid Derivatives:

    • Engaging with Ethereum staking solutions such as Lido, Rocket Pool, and Frax ETH.

    • Earning staking rewards while maintaining liquidity via LSD protocols.

  • Lending & Liquidity Markets:

    • Deploying assets into established lending platforms like Aave, Morpho, and Euler.

    • Securing yield through overcollateralized lending and liquidity provision.

  • Delta-Neutral Yield Strategies:

    • Funding Rate Arbitrage: Capturing inefficiencies in perpetual futures markets.

    • Hedged Strategies: Structuring offsetting positions to generate passive returns with minimized price exposure.

Yield allocations are dynamically managed to optimize risk-adjusted returns, with strict exposure thresholds to maintain diversification and stability.

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Last updated 1 day ago