Introducing Yield Routes

We’re excited to introduce Yield Routes: the first permissionless yield-generating bridges. Yield Routes allow L2-bridged assets to become productive assets that automatically compound yield, like Blast and Manta. Anyone will be able to deploy Yield Routes, especially L2s.

Yield Routes are a simple variation of Hyperlane Warp Routes, compatible with any ERC-4626 vault for a variety of passive yield opportunities on any chain. Yield Routes go live with multiple launch partners soon, so here’s a quick breakdown of what’s new:

Why Yield Routes?

Yield Routes have been our most requested feature for the past few months, and for good reason. The rise of L2s like Blast and Manta demonstrated the demand for passive yield, and up-and-coming L2 teams are itching to put their spin on the idea. But why exactly is it such a big deal?

Traditional bridged assets are unproductive assets. They sit idly in the bridge contract and get diluted lower in value.

Yield Routes enable bridged assets to be productive assets. Yield Route assets start auto-compound yield passively the moment you bridge.

We expect yield-bearing bridges to be table stakes for all L2s over the next couple months. And Hyperlane Yield Routes are leading the way as the only permissionless and customizable offering.

How Yield Routes Work

Warp Routes

Warp Routes are Hyperlane’s version of token bridging, allowing permissionless transfers of any ERC20 or ERC721-like asset to any chain.

Each Warp Route is a bridge in itself, secured by customizable Interchain Security Models (ISMs) and is permissionless to deploy with our Warp API. You can think of this like each asset has its own dedicated bridge (Warp Route) with dedicated security model.

Combined with Permissionless Interoperability, Warp Routes uniquely enable developers to open secure bridging for any asset on any chain.

What’s New

Yield Routes are just Hyperlane Warp Routes with 2 differences:

1. When you bridge through a Yield Route, the contract deposits the collateral into a yield-bearing ERC-4626 vault (decided by the deployer). You receive a corresponding auto-compounding token on the L2.
2. When you bridge back, your collateral assets are redeemed from the vault. Importantly, the contract owner can set how to allocate the vault yield. The yield can go directly to the user, it can be split, or it can be kept entirely by the contract owner to be used for creative incentive mechanisms. This could allow chains to use the yield to subsidize transactions, help pay for operations, or distribute to token holders.

For example, warped/bridged USDC goes into Maker to generate DAI yield.

And once native assets are supported, developers can get even more creative. Example: ETH goes into restaked ETH protocol to generate ETH + restaking yield.

TLDR

The introduction of Yield Routes levels the playing field:

• Anyone can easily access the passive yield bridging that helped Blast and Manta onboard so much capital.
• Anyone can deploy and customize their Yield Routes for unique yield opportunities and incentive mechanisms.
• Anyone can access Hyperlane interoperability and bring these features to their chain/L2 with Permissionless Deployments.

What’s Next?

We have multiple launch partners that we’ll be going live with over the next weeks, so stay tuned! Everyone is experimenting with different yield opportunities on their Yield Routes and we’re hyped to see them in action.

Interested in Yield Routes?

Fill out this form to become a launch partner. Or visit our Warp Route docs to learn more.

Want to contribute to Hyperlane and Yield Routes? We have live bounties here and here.

More about Hyperlane

Hyperlane is the permissionless interoperability layer connecting the modular ecosystem. With Hyperlane, anyone can connect any blockchain, rollup, appchain, on any VM. Additionally, Hyperlane’s modular security stack gives developers the power to customize their interchain security to their needs.

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