dYEL is backed by treasuries. Treasuries consist of different assets used for bonding.
- Wrapped native currency of the chain
- Tokens of leading protocols by TVL and MC
- Stable coins
Trassuries may be different in terms of composition on every chain. Nevertheless, the price of every asset in it affects dYEL price. That is what makes dYEL a real DeFi index.
However, assets should not be just held. They have to work to generate more wealth and benefit DeFi space as well as increase backing price. Therefore, treasuries will be actively managed. They will be staked for farming rewards, used as a capital provision for borrow markets, and leveraged farming. That would generate an additional ROI that will be added to treasuries, hence increasing the backing price of dYEL.