Add PT-yoUSD to the Frontier YO yoUSD Market

Euler DAO Markets
1

Summary

This proposal seeks approval from the Euler DAO to add PT-yoUSD as a new collateral asset into the Frontier YO yoUSD market on Base. With over $3.1m USDC borrowed and $4.24m yoUSD supplied, the Frontier YO yoUSD is the second largest market on Base, and features a constant utilization above 80%. Both data points indicate strong demand for yoUSD loops, so adding its PT derivative will further grow this market.

Introduction

yoUSD is YO protocol’s basket of top-rated yields in all of DeFi. Users earn yield from 15+ sources across 3+ chains at any given time, giving users access to unparalleled transparency (all sources are onchain), yields (ranks in the top decile for stablecoin yields) and utility (as evidenced by the high utilization of its Euler market). The vault has grown to $19m in TVL since its launch in mid-May and already has a Pendle market as well. PT-yoUSD has grown to $1m in TVL and currently trades at an implied APY of 15.9%

Motivation

Demand for yoUSD loops has been consistently high, with the Frontier YO yoUSD market keeping utilization high above 80% since launch. YO is also sponsoring lender incentives to bring more USDC supply to the market. Lenders are currently earning >13% APR, making it one of Base’s best risk-adjusted opportunities. Adding PT-yoUSD will add more structural demand to this market as it also boasts one of Base’s highest fixed yields > 15%. With a borrow cost of ~6% at the kink, this means loopers could earn a hefty 96% max ROE. This opportunity of looping PT-yoUSD would be exclusively available on Euler since there is already an existing market and liquidity that can support this new pair.

Benefits to Euler Users

  1. Isolated pair, leveraging Frontier markets’ unique infra
  2. More collateral options for higher organic rates for lenders, which increases supply to meet the borrower demand
  3. For borrowers, a safe venue to loop an attractive PT opportunity

Specs

Frontier YO yoUSD Market: https://app.euler.finance/borrow?market=frontier-yo-yousd&network=base
PT-yoUSD: 0xb04cee9901c0a8d783fe280ded66e60c13a4e296
Pendle yoUSD Market: 0x44e2b05b2c17a12b37f11de18000922e64e23faa

Author details

0scar R - Head of Product & DeFi at YO
@0scaronchain on X

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