Is Yearn Finance Safe?
Risk Grade: C+ (38/100)
Yearn Finance is rated as elevated risk — multiple novel mechanisms and notable interaction risks.
Moderate risk — pioneered yield vaults and holds $560M, but repeated legacy code exploits and admin key risk undermine confidence
The original DeFi yield aggregator that automatically invests your deposits across lending and trading protocols to maximize returns. It manages $560M in deposits. Its C grade reflects four separate hacks across its history -- including two in 2025 targeting old vault code -- and the risk that a compromised admin key could redirect all vault funds instantly.
TVL
$208M
Mechanisms
7
Interactions
5
Value Grade
B-
Key Risks for Yearn Finance Users
Four separate hacks have hit Yearn vaults, including a $9M exploit in December 2025 and a $11M exploit in 2021 -- old code keeps getting attacked
An admin key holder can attach a new strategy to any vault at any time with no delay -- if that key gets stolen, vault funds can be drained instantly
Your deposits are spread across other DeFi protocols like Aave and Curve -- if any of those get hacked, your Yearn vault takes the loss
Top Risk Factors
- •Four separate exploits confirmed: $11M DAI vault (Feb 2021), $9M yETH (Dec 2025), $300K TUSD (2025), and a March 2026 legacy v1 vault drain of ~$290K — establishing a persistent pattern of legacy code exploitation on Yearn infrastructure
- •Controller/strategist key can connect vaults to arbitrary strategies, enabling fund drainage with no user warning period
- •Multi-strategy vault composition increases attack surface — each additional strategy adds a potential exploit vector
How Yearn Finance Compares to Peers
Yearn Finance ranks #64 of 116 Yield protocols (below-median — riskier than average). At a risk score of 38/100, it's in line with the sector average (37/100).
Adjacent peers: Zoo Finance (C+, 37/100) is ranked just safer, and Extra Finance Vaults (C+, 38/100) is ranked just riskier.
See the full Yield sector leaderboard or the Yearn Finance vs Extra Finance Vaults comparison.
Common Questions about Yearn Finance
Plain-English answers based on Yearn Finance's scores across Hindenrank's 8 risk dimensions. The highest-scoring (riskiest) dimension is Track Record (13/15).
Has Yearn Finance ever been hacked or exploited?
Yearn Finance has a documented incident history that materially raised its risk grade — the track record dimension scored 13/15, near the high end of the scale. Past exploits, governance failures, or contract issues are baked into this rating. Anyone considering deposits should review the incident details before allocating capital.
How much money is at stake in Yearn Finance?
Yearn Finance currently holds more than $208M in user deposits. A protocol of this size typically has deeper liquidity, more eyes on the code, and more attention from auditors — but it also means a single failure has a much larger blast radius.
What's the worst-case scenario for Yearn Finance?
Hindenrank has identified specific collapse scenarios for Yearn Finance. The most prominent: "Legacy Contract Exploit Chain". The trigger condition is Attacker discovers exploitable invariant in remaining V1 or iEarn legacy contracts holding >$5M in residual user funds. Reading through the full scenario list on the protocol page is the single best way to understand the actual failure modes — generic "smart contract risk" is rarely the thing that takes a protocol down.
Is Yearn Finance regulated or insured?
Yearn Finance has low regulatory exposure on Hindenrank's framework (2/10). The protocol is structured in a way that minimizes counterparty and jurisdiction concentration, though regulatory risk in crypto can change rapidly. No DeFi protocol carries FDIC-style insurance — even with low regulatory risk, depositors are not protected in the way bank customers are.
What are the biggest red flags for Yearn Finance?
Hindenrank's retail-focused risk audit flagged: Four separate hacks have hit Yearn vaults, including a $9M exploit in December 2025 and a $11M exploit in 2021 -- old code keeps getting attacked An admin key holder can attach a new strategy to any vault at any time with no delay -- if that key gets stolen, vault funds can be drained instantly Your deposits are spread across other DeFi protocols like Aave and Curve -- if any of those get hacked, your Yearn vault takes the loss On the technical side, 1 critical-severity interaction risk has been identified.
Should beginners deposit into Yearn Finance?
Yearn Finance's C+ grade puts it in the elevated-risk band. This is not a beginner-friendly protocol. Anyone depositing here should treat the position as speculative and avoid concentrating significant savings in it.
How does Yearn Finance compare to safer Yield alternatives?
Yearn Finance is one protocol in Hindenrank's Yield coverage. The safest Yield protocols on the leaderboard tend to share three traits: a long incident-free track record, conservative mechanism design, and high-quality public documentation. Compare Yearn Finance against the full Yield ranking before committing capital.
For the full 8-dimension score breakdown, the radar chart, and dependency graph, see the Yearn Finance risk report.
Read the Full Yearn Finance Risk Report
This protocol has 2 collapse scenarios. 1 critical and 2 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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