The funding will help improve YO Protocol’s infrastructure and expand its reach, positioning it as core infrastructure for fintechs, wallets, and developers.
YO Labs, the development team behind YO Protocol, has raised $10 million in a Series A round to expand its crypto yield optimization platform.
Venture capital firm Foundation Capital led the round, joined by Coinbase Ventures, Scribble Ventures, and Launchpad Capital.
The San Francisco-based company plans to use the funding to bring its yield optimization protocol to more blockchains and improve its infrastructure.
YO Protocol is designed to help users earn yield on crypto assets by automatically rebalancing capital across multiple decentralized finance (DeFi) protocols while factoring in risk. It currently offers users access to USD, EUR, BTC, and gold-based yield products.
Unlike most DeFi yield aggregators that operate within a single blockchain, YO’s system works across chains. Its vaults — yoETH, yoUSD, yoBTC, yoEUR, and yoGOLD — dynamically allocate capital to wherever the risk-adjusted yield is most favorable, according to a press release shared with CoinDesk.
This is powered by Exponential.fi, a platform built by the same team to assign transparent risk scores to DeFi protocols. The protocol’s core innovation lies in its calculation of “Risk Adjusted Yield,” a metric derived from the team’s background in building risk ratings for DeFi pools, the protocol’s co-founder and CIO, Mehdi Lebbar, told CoinDesk in an interview.
Rather than chasing the highest advertised percentages, the system calculates a probability of default based on thousands of risk vectors, which range from a protocol’s age to its code audit history.
To mitigate the security vulnerabilities often associated with moving assets between blockchains, YO Labs employs a unique architecture that minimizes reliance on bridges, Lebbar said. Instead of constantly moving funds across chains, the protocol establishes what the team describes as “embassies” — independent vaults holding native assets on each blockchain.
“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,” 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.”
Beyond architecture, the system employs a ‘DeFi Graph’ to manage active risks during market volatility or protocol failures — what Lebbar calls ‘Armageddon scenarios.’ This system monitors dependencies up to five levels deep, allowing the protocol to trigger automated withdrawals if a pool is indirectly exposed to a failing asset, Lebbar said.
The funding round brings YO Labs’ total raised to $24 million, including a previous seed round led by Paradigm. With the new capital, the company is positioning YO as core infrastructure for fintechs, wallets, and developers looking to embed sustainable yield into their products.
