Yei Finance is decentralised non-custodial money market protocol where users can participate as suppliers, borrowers or liquidators. Suppliers provide liquidity to a market and can earn interest on the crypto assets provided, while borrowers are able to borrow in an overcollateralized fashion. Borrowers can also engage in one-block borrow transactions (”flash loans”), which do not require overcollateralization.
Yei Finance allows users to optimize their assets supplied to the Yei Finance in terms of yield generation and borrowing power.
The High Efficiency Mode or eMode allows borrowers to extract the highest borrowing power out of their collateral when supplied and borrowed assets are correlated in price, particularly when both are derivatives of the same underlying asset (eg. stablecoins pegged to USD).
This can enabling a wave of new use cases such as High leverage forex trading, Highly efficient yield farming (for example, deposit ETH staking derivatives to borrow ETH), Diversified risk management etc.
New assets can be listed as isolated in Yei Finance. Borrowers supplying an isolated asset as collateral cannot supply other assets as collateral (though they can still supply to capture yield). Borrowers using an isolated collateral can only borrow stablecoins that have been configured by Yei Finance to be borrowable in isolation mode, up to a specified debt ceiling.
Siloed borrowing allows assets with potentially manipulatable oracles (for example illiquid AMM pairs) to be listed on Yei Finance as single borrow asset. This means that if an asset is configured as siloed, it can't be borrowed in a position at the same time as with other assets. This helps mitigating the risk associated with such assets from impacting the overall solvency of the protocol.
Yei Finance brings a greatly improved set risk parameters and new features to protect the protocol from insolvency.
Yei Finance can now configure Borrow and Supply Caps.