Yearn Finance Recovers $2.​39M in Coordinated yETH Asset Recovery Operation

**Yearn's OEV-boosted USDC vault on Morpho has received an A rating**, joining highly-rated vaults from Stakehouse and Gauntlet. The vault utilizes **Oracle Extractable Value (OEV) technology** to recapture value that would otherwise be lost to MEV bots, redirecting it back to depositors as enhanced yield. **Key highlights:** - A-grade rating validates vault's risk management and performance - Part of Yearn's expanding curation services on Morpho - OEV-boosting technology provides sustainable yield enhancement - Previously surpassed $10M in deposits milestone Yearn continues to demonstrate its **best-in-class vault curation and monitoring capabilities** across the Morpho ecosystem, offering institutional-grade DeFi products with enhanced risk assessment.

**Yearn Finance suffered a $9 million exploit** on November 30 at 21:11 UTC targeting the yETH stableswap pool. **Damage breakdown:** - $8M lost from the impacted stableswap pool - $0.9M from the yETH-WETH pool on Curve - **Total: $9 million** The attack involved minting large amounts of yETH through a vulnerability in custom stableswap code. **Yearn V2/V3 vaults remain unaffected** and secure. **Response efforts:** - War room activated with SEAL911 and ChainSecurity - Full postmortem investigation underway - Complexity similar to recent Balancer hack Yearn emphasized that **no other products use similar code** to the exploited contract. The team is conducting thorough analysis and will implement lessons learned. Affected users can seek assistance through Yearn's [Discord support](https://discord.gg/yearn/). The protocol maintains detailed [security documentation](https://docs.yearn.fi/developers/security/#third-party-audits) covering audit history and vulnerability disclosure processes.

**Yearn has confirmed that its Curated Morpho vaults remain secure** following an investigation into the yETH LST stableswap pool incident. Key safety confirmations: - **yETH/st-yETH tokens were not used as collateral** on any markets - All Curated Morpho vaults are operating normally - No user funds in these vaults were at risk This follows earlier reports of an incident involving the yETH LST stableswap pool, which prompted the investigation. **Yearn's V2 and V3 vaults were already confirmed as unaffected** by the initial incident. The confirmation provides clarity for users of Yearn's Morpho integration, ensuring that collateral exposure was limited and vault operations continue without disruption.

**Yearn's new USDS vault through Term Labs is gaining traction**, offering depositors an average **6% yield** through a dual-strategy approach. The vault operates by: - Earning **7.5% APY** on ~69% of deposits through fixed-rate lending - Generating **4.8% APY** on remaining funds via Yearn's USDS vault - Providing additional **Cap Money points** on collateral Term Labs uses **sealed-bid auctions** every ~4 days to match lenders with borrowers seeking loans against blue-chip collateral. Currently serving a **$445K USDS loan** for 45 days at 7.5% annualized rate, backed by fixed-duration cUSD collateral. **Idle funds aren't wasted** - they're automatically allocated to Yearn's USDS vault until the next auction, maximizing yield efficiency. Yearn's DAI-2 vault also participates by converting DAI to USDS at 1:1 ratio before depositing into the Term strategy.