The Covenant fringe is an unofficial group of species affiliated with, but never officially incorporated into the Covenant Empire, for a variety of reasons. Very little is known about the species within the fringe, other than that they include the Yonhet.
The Covenant fringe was formed from various species whose integration into the Covenant wasn't deemed advantageous enough to be worth it, for many reasons, including (in the Yonhet's case) military insignificance. By shortly before the Human-Covenant war, this group of species was known as the 'fringe'.
Upon the outbreak of the war though, most of the species within the fringe went into hiding, due to the immense scale of the conflict. Little was heard of them by humanity until they began to resurface after the close of the war, when it seemed safe to begin trading and expanding again.