YO Labs, the team behind the YO Protocol, has secured $10 million in Series A funding to expand its cross-chain crypto yield optimization platform. The investment, led by Foundation Capital, aims to enhance infrastructure and broaden blockchain support. The protocol automates yield generation across DeFi protocols while prioritizing risk management.
YO Labs, based in San Francisco, announced a $10 million Series A funding round on December 13, 2025, to scale its YO Protocol. The round was led by Foundation Capital, with participation from Coinbase Ventures, Scribble Ventures, and Launchpad Capital. This brings the company's total funding to $24 million, following a seed round led by Paradigm.
The YO Protocol automates yield generation for crypto assets by rebalancing capital across multiple decentralized finance (DeFi) protocols. It factors in risk to optimize returns and provides access to yield products based on USD, EUR, BTC, and gold. Unlike typical DeFi yield aggregators confined to a single blockchain, YO operates cross-chain through its vaults: yoETH, yoUSD, yoBTC, yoEUR, and yoGOLD. These vaults dynamically allocate capital to the most favorable risk-adjusted yields.
The system is powered by Exponential.fi, which assigns transparent risk scores to DeFi protocols. At its core is the 'Risk Adjusted Yield' metric, developed from the team's expertise in DeFi risk ratings. Co-founder and CIO Mehdi Lebbar explained that it calculates a probability of default using thousands of risk vectors, including a protocol's age and code audit history, rather than focusing solely on advertised yields.
To address cross-chain security risks, YO Labs minimizes bridge usage. Instead, it deploys 'embassies'—independent vaults holding native assets on each blockchain. Lebbar stated, "If you bridge a pool, you have exposure to the risk of the bridge... We needed to create these 'embassies' across multiple planets, these vaults across multiple chains that hold native assets." He added, "If you have USDC on Arbitrum, that is the same USDC as on Ethereum, and you no longer have the bridge in the middle... that's much safer."
Additionally, the protocol uses a 'DeFi Graph' to monitor dependencies up to five levels deep, enabling automated withdrawals during market volatility or protocol failures—scenarios Lebbar termed 'Armageddon scenarios.' With the new funding, YO Labs plans to position the protocol as essential infrastructure for fintechs, wallets, and developers integrating sustainable yield products.
