Yearn is a non-custodial platform, meaning that user funds are not held by Yearn but instead are held in smart contracts. This allows users to be in full control of their funds, as they can withdraw them at any time. The fact that users can deposit into vaults that have the embedded functionality to switch funds and rebalance between other protocols does not make Yearn custodial. This is because users are still in control of their funds, as they can withdraw them at any time. Furthermore, the funds are still held in a smart contract, and the only actions that can be taken with them are those approved by the user. This means that Yearn does not have any control over the funds, and therefore is not custodial.
