fyeth.finance: YETH: Yield Optimization and Risk Management in Decentralized Finance
The fyeth.finance whitepaper was written and published by the Yearn core team against the backdrop of the development of Ethereum’s liquid staking ecosystem, aiming to provide a decentralized, efficient, and risk-controlled solution for the rapidly growing market of liquid staking tokens (LSTs).
The theme of the fyeth.finance whitepaper can be summarized as “yETH: a community-governed Ethereum liquid staking token index.” What makes fyeth.finance unique is its proposal of an automated market maker (AMM) model combining a “weighted stableswap pool + user governance,” integrating multiple LSTs into a single asset, YETH, and optimizing its application in DeFi by separating the underlying asset (YETH) from yield accumulation (st-YETH); the significance of fyeth.finance lies in providing DeFi users with a flexible and capital-efficient ETH staking exposure, while dynamically adjusting LST weights to optimize risk and return, and offering an ideal liquidity asset for stableswap pools.
The original intention of fyeth.finance is to provide a decentralized, efficient, and risk-controlled solution for liquid staking within the Ethereum ecosystem. The core viewpoint presented in the fyeth.finance whitepaper is: by building a community-governed weighted stableswap pool of LSTs and separating the underlying asset (YETH) from yield accumulation (st-YETH), it is possible to maintain asset pegs while offering users optimized risk-adjusted returns and efficient liquidity.