This investment comes amid a strong venture capital interest in DeFi projects in 2025
Yo Labs, the company behind the Yo Protocol, has announced a closing of $10 million investment. The Series A funding round was announced on December 13.
This money will help Yo Labs grow its decentralized finance, or DeFi, service. The protocol focuses on finding the best possible earnings for users’ cryptocurrency across different blockchain networks.
This investment round was led by Foundation Capital. Other important investors joined, including Coinbase Ventures, Scribble Ventures, and Launchpad Capital.
With this new money, Yo Labs has now raised a total of $24 million, which comes after a previous seed round led by Paradigm.
The Yo Protocol is different from other services that provide cryptocurrency yields. Most services operate on just one blockchain. Meanwhile, Yo Protocol works across several other blockchains at once.
This is known as operating cross-chain. It uses special vaults with names like yoETH and yoUSD, where users deposit their assets into these vaults. The system then automatically moves these funds around. Its main purpose is to find the highest and safest returns available anywhere in DeFi.
The main purpose of this cross-chain yield protocol is boost safety for users. The system avoids the most risky techniques. Instead, it uses a complex risk analysis process, where it scans thousands of possible issues. These include how old a DeFi protocol is and its audit history. It even calculates the probability of a protocol failing. In order to perform safety checks, its partner platform, called Exponential.fi helps with these risk scores.
“If you bridge a pool, you have exposure to the risk of the bridge… We needed to create these ’embassies’ across multiple planets, these vaults across multiple chains that hold native assets,” Yo Protocol’s co-founder and CIO, Mehdi Lebbar, said. “If you have USDC on Arbitrum, that is the same USDC as on Ethereum, and you no longer have the bridge in the middle… that’s much safer.”
The team built the protocol with security as a major concern. A major factor in innovation is the use of embassies.
Instead of pooling all assets in one place, Yo Protocol keeps separate vaults on each blockchain it supports. This design limits the need to bridge funds between chains. As the DeFi ecosystem is expanding, bridging is a process that can be a security weak point. By keeping assets native to each chain, the protocol reduces this risk.
Another important tool is the DeFi Graph. This system watches how different DeFi protocols are connected. It can see dependencies up to five levels deep.
If a problem occurs in one protocol, the graph can trigger automatic safety actions. For example, it can quickly pull funds from another protocol that might be affected. This helps protect users’ money during times of high market volatility.
Venture capital is flowing into crypto, especially into DeFi and infrastructure projects. Investors are continuously providing capital support to DeFi projects.
Just days before Yo Labs’ announcement, another platform called Pye Finance raised $5 million. Meanwhile, Coinbase Ventures also joined that round. Earlier in December, a company named Surf raised $15 million for AI-based crypto market research. Other companies, like Donut Labs and Cloudburst, have also secured millions in funding this year.
