YO Labs Secures $10M in Funding to Expand Cross-Chain Crypto Yield Optimization

YO Labs, the team behind the YO Protocol, has successfully raised $10 million in its Series A funding round, aiming to further develop its crypto yield optimization platform. The funding round was led by venture capital firm Foundation Capital, with participation from notable investors such as Coinbase Ventures, Scribble Ventures, and Launchpad Capital. The San Francisco-based company intends to utilize the funding to integrate its yield optimization protocol with more blockchains and enhance its infrastructure. The YO Protocol is designed to facilitate yield generation for crypto assets by automatically rebalancing capital across multiple DeFi protocols, considering risk factors. It currently offers users access to a variety of yield products based on USD, EUR, BTC, and gold. Unlike traditional DeFi yield aggregators that operate within a single blockchain, YO's system functions across multiple chains. Its vaults, including yoETH, yoUSD, yoBTC, yoEUR, and yoGOLD, dynamically allocate capital to maximize risk-adjusted yield. This capability is powered by Exponential.fi, a platform developed by the same team, which assigns transparent risk scores to DeFi protocols. The core innovation of the protocol lies in its calculation of 'Risk Adjusted Yield', a metric derived from the team's experience in building risk ratings for DeFi pools, according to Mehdi Lebbar, the protocol's co-founder and CIO. Rather than focusing solely on the highest advertised yields, the system calculates a probability of default based on thousands of risk vectors, ranging from a protocol's age to its code audit history. To mitigate security vulnerabilities associated with inter-blockchain asset transfers, YO Labs employs a unique architecture that minimizes reliance on bridges. Instead of constantly moving funds across chains, the protocol establishes 'embassies' - independent vaults holding native assets on each blockchain. This approach enhances security by eliminating the risks associated with bridging assets between chains. The system also utilizes a 'DeFi Graph' to manage active risks during market volatility or protocol failures, allowing for automated withdrawals if a pool is indirectly exposed to a failing asset. With this funding round, YO Labs has raised a total of $24 million, including a previous seed round led by Paradigm. The company is positioning YO as a core infrastructure for fintechs, wallets, and developers seeking to integrate sustainable yield into their products.