YieldNest has introduced ynRWAx, a real-world asset (RWA) vault designed for integration within DeFi lending and yield strategies, including looping. RWA-based looping represents an emerging segment within DeFi, where tokenized real-world assets may provide yield derived from off-chain credit, potentially offering a more consistent spread relative to on-chain borrowing rates.
The vault is structured to target an estimated annual percentage yield (APY) of approximately 11%, sourced from mortgage-backed private credit secured against residential real estate in Australia. The underlying credit strategy is managed by Kimber Capital (AFSL No. 425278), while YieldNest provides the on-chain infrastructure. According to the project, the yield is generated through secured lending activity and does not rely on synthetic exposure or incentive-driven mechanisms.
ynRWAx is positioned as a yield-bearing asset intended to provide exposure to real-world credit within a DeFi framework.
The asset is designed to be compatible with DeFi looping strategies, where users deposit collateral, borrow against it, and redeploy capital to increase exposure. The effectiveness of such strategies depends on the spread between borrowing costs and the yield generated by the underlying asset.
ynRWAx is implemented as an ERC-4626-compliant vault, enabling composability across DeFi lending protocols. This structure allows the asset to be integrated into lending markets and other yield strategies without permissioned restrictions.
The vault currently holds over $7.5 million in total value locked (TVL) and is deployed across eight blockchain networks, including Ethereum, Base, Arbitrum, and Polygon.
Users can loop ynRWAx through live integrations on Euler V2 (which offers one-click execution via its Multiply feature) and Morpho (which provides isolated risk pool architecture). Additional yield strategies are available through Pendle and Spectra, which tokenize ynRWAx into fixed and variable yield components. Incentive programs on Merkl and Brevis Incentra provide supplementary rewards on top of the base yield spread.
In order to loop ynRWAx users can (step by step):
- Step 1: Deposit USDC, mint ynRWAx
- Step 2: Supply ynRWAx as collateral on Euler or Morpho
- Step 3: Borrow USDC against their ynRWAx position
- Step 4: Use borrowed USDC to mint more ynRWAx
- Step 5: Repeat steps 2-4 until they reach their target exposure
A detailed walkthrough of the looping mechanic, yield mathematics, and risk framework is available on the YieldNest blog.
About YieldNest
YieldNest is a next-generation DeFi protocol that offers simple, high-yielding, risk-adjusted restaking and DeFi strategies. It merges DeFi’s best strategies into single, unified, high-powered assets with L1 settlement assurances.
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