Introduction

YieldShield is a split-risk protection protocol. Holders protect an asset against a fixed backing claim, and first-loss providers are paid to reserve that backing on-chain and carry the downside. Both sides can see the backing, fees and terms before they commit.

YieldShield is chain-agnostic: our mission is to protect people wherever they invest on-chain, with one design built natively for each chain. It is live on seven testnets, with valueless test tokens and unaudited contracts. It is not traditional insurance, and it does not guarantee returns. You can try it in the testnet apps.

How YieldShield Works

The diagram above shows the core flow:

• First-loss providers fund the backing in advance. They earn a share of holders' realized gains, and they receive the asset whenever a holder takes the backing instead, so they lose money if that asset fell.
• Protection pools hold the reserved backing and apply each position's terms on-chain.
• Holders deposit an asset and keep its upside. Before the position closes, they choose an asset exit (keep the asset and pay a share of the realized gain) or a backing exit (take the fixed backing claim).

Why YieldShield?

Risk You Can See

The backing, collateral ratio, fees and terms of every pool are on-chain. Anyone can check them before committing, rather than relying on a promise.

No Claims Process

There is no claim to file or approve. A holder who wants the backing takes the backing exit, and the contract pays the fixed claim, within the limits described on the Protection page.

Upside Stays with the Holder

Holders keep their asset's yield and price gains, and pay a share only when they realize a gain. Providers are paid for the risk they carry out of that gain share.

Built to Plug into DeFi

The original design uses a standard adapter for yield-bearing tokens, such as ERC-4626 vault shares and Aave tokens, so protected assets can keep earning. That yield comes from the underlying protocol, which carries its own risks.