Listing yUSD as Collateral on V3 Mainnet USDC and USDT Comets

New Markets
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Abstract

This proposal requests to list YieldFi’s yUSD, a yield-bearing, fully collateralized stablecoin, as a supported collateral asset on the Compound protocol. This addition aims to enhance collateral diversity, increase capital efficiency for users, and integrate a productive stablecoin that yields attractive APY while maintaining strong liquidity and security.

Introduction

YieldFi is a permissionless on-chain asset management platform tailored for treasuries, funds, foundations, and individual investors, offering liquid yield bearing tokens across a variety of assets. Since its inception, YieldFi has rapidly grown to $110M in TVL, driven by a commitment to providing transparent, secure, and high-yield decentralized asset management.

Motivation & Context

yUSD is an ERC-20 compliant, fully collateralized, and yield bearing stablecoin issued by YieldFi. The yUSD token is designed as a cross-chain asset management vehicle, offering users 10% to 12% APY on USDT, USDC, and DAI with daily rewards and deep integration in DeFi protocols like Pendle, Morpho, Curve etc.

YieldFi’s yUSD has experienced strong growth in yield and TVL, reflecting increasing user trust and adoption. The token has no lock-in period, offers deep liquidity across several money markets, and can be withdrawn or swapped anytime. yUSD is already supported and traded on major EVM chains. Adding yUSD as collateral empowers Compound users to leverage high-quality stable assets earning yield, thus improving the protocol’s competitiveness and user experience.

Benefits

Collateral Diversity: Expands high-quality stablecoin choices, supporting looping and leveraged yield strategies.

Yield on Collateral: yUSD’s productive nature enables users to earn yield on supplied collateral while borrowing, maximizing capital efficiency.

Deep Liquidity: Well-established pools across DeFi ensure robust liquidity for yUSD interactions.

Capital Efficiency: yUSD’s strong peg and yield attributes support borrowing, leveraged farming, and a range of new DeFi strategies.

Pricing Oracles

yUSD price feeds can be sourced from established decentralized oracles (e.g., Chainlink, Pyth), referencing fundamental price i.e. exchangeRate() value

Liquidity Pools

Curve yUSD-syrupUSDC

Security Considerations

Cyfrin Audit Report
Halborn Audit Report
Cantina Audit Report

Important Links

Website
Documentation
Transparency Dashboards
Dune Analytics
Github

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[Gauntlet] yUSD Risk Recommendations for Mainnet USDC & USDT Comets

Simple Summary

Should the community choose to list yUSD on the Mainnet USDC and USDT Comets, Gauntlet recommends the following risk parameters:

Risk Parameters

Comet Collateral Supply Cap Collateral Factor (CF) Liquidation Factor (LF) Liquidation Penalty (LP)
Mainnet USDC yUSD 3,000,000 88% 90% 4%
Mainnet USDT yUSD 3,000,000 88% 90% 4%

DEX Liquidity

Pool Type Pool Name Pool URL TVL ($) 24H Volume ($)
Ethereum-Curve yUSD / syrupUSDC Link 9.21M 37.19K

Total TVL: $9.21MM

Slippage

USDC

image
image734×362 48.8 KB

USDT

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image727×361 47.4 KB

Analysis

Supply Caps

Given the observed slippage, Gauntlet recommends setting both supply caps to 3,000,000 yUSD. The slippage on both swaps is under 1%, which is well below the 4% liquidation penalty, ensuring sufficient incentive for liquidators.

CF/LF/LP

Gauntlet recommends aligning the CF, LF, and LP for the USDC Comet and USDT Comet to match those of other stablecoins on the Comets.

Next Steps

  • We welcome community feedback.
3

While I’m generally onboard with exploring new assets to add to mainnet markets, yUSD’s backing is a discretionary prop fund.

The backing has exposure to 20+ different venues (e.g. Pendle, Maple, Ethena, Morpho, Resolv, etc), using highly leveraged positions at low health ratios, depending on what the managers decide that week. Sometimes it holds yUSD within its own backing(?). There’s no established risk limits for what they deploy backing into. This is an extremely risky asset to take into a blue-chip name like Compound, and likely a bad decision for the DAO.