What is Yearn Finance?
Yearn Finance is an ecosystem of protocols built on top Ethereum aims to simplify user interaction with popular DeFi protocols and maximize the actual annual rate of return (APY) of cryptocurrencies deposited into DeFi.
The most popular protocol in this ecosystem is yearn.finance which automatically moves user money between DeFi loan protocols such as Compound , Aave and Dydx to maximize APY. The entire yearn.finance ecosystem is developed by the community and managed by the community through the YFI token.
Watch now: What is Defi (Decentralized Finance)?
Formerly known as iEarn, yearn.finance, was created by a single developer, Andre Cronje.
After being mined in February 2, Andre announced he was leaving the project after being met with backlash from the community. Then he came back and the project was renamed yearn.finance.
yEarn provides a decentralized foundation for yield farming opportunities. By combining different platforms, it helps users to optimize their yield farming results. When users deposit tokens into the platform, they are converted to yToken.
YToken's top integrator is Curve because it created automatic market generator (AMM) between yUSDT, yUSDC, yTUSD, yDAI.
Yearn Finance products
In addition to the popular protocol of the same name as the Yearn.finance ecosystem, the rest of the protocols include:
- Ytrade.finance: Allows you to trade with limited leverage at 1000 times with upfront fees or 250 times without activation fee. ytrade allows trading between $ DAI, $ USDC, $ USDT, $ TUSD and $ sUSD.
- Yliquidate.finance: Use fast loans in Aave to liquidate your money
- Yswap.exchange: Yswap exchange offers stable AMM (automated market maker), allowing for one-sided liquidity.
- Yleverage.finance: Create a leveraged DAI vaults with X5 with USDC
- Iborrow.finance: Credit vault for smart contract loan smart contract
Last, not least, Yearn Finance has also provided a “Staking dashboard” to help users easily. staking and cancel their positions on any of Yearn Finance's liquidity pools. It has a name ygov.finance
How does Yearn Finance work?
Yearn's activities are considered to be more accessible than other Defi projects. It works by moving stablecoin funds between different projects like Aave, Compound and DyDx.
The movement of these stablecoins depends on the stablecoin that is generating the highest APY. The currencies that finance wants to support are DAI, USDC, USDT, TUSD and sUSD. These supported currencies may change over time as the protocol is regulated by the community.
Whenever a user initially sends a stablecoin to Yearn finance, it is automatically converted into a similar amount of tokens. This can be used to earn YFI tokens.
Yearn Finance (YFI) virtual currency
YFI is a Native Token used to manage protocols in the Yearn Finance ecosystem.
Basic information about YFI copper
- Ticker: YFI
- Blockchain: Ethereum
- Token type: Native Token
- Token Standard: ERC-20
- Total supply: 30.000 YFI
- Circulating Supply: 29.962 YFI
Token allocation YFI
YFI was given 30.000 tokens which were evenly distributed to the platform users and liquidity providers through three different mechanisms:
- Provides liquidity on Curve to receive yCRV, which can then be staking.
- Provides liquidity on Balancer YFI pool consisting of 98% DAI and 2% YFI.
- For those who provide liquidity on the Balancer and receive a balance pool token (BPT), they can staking BPT to be able to participate in governance.
What is YFI coin used for?
YFI token holders have the right to vote on upcoming governance decisions towards the network - such as the possibility of stopping the distribution of brand new tokens.
How to earn YFI tokens
Based on how the project works and the diagrams I have provided. As well as learning through the simple token allocation mechanism, you can understand YFI token making as follows:
- Simultaneously send about 98% DAI and 2% YFI to the Balancer protocol. In return, this amount can be exchanged for BAL (Balancer protocol) tokens. These BAL tokens are then deposited into YGov in exchange for YFI.
- Deposit a stablecoin into Yearn Finance. This amount is then automatically converted into a similar amount of tokens that can be used to earn YFI tokens.
- Simultaneously send YFI and yCRV to the Balancer exchange. This money is exchanged for BPT token (Balancer pool). After that, they continue to be sent to YGov to obtain the YFI token.
- Register an account and buy on listed exchanges such as: Binance, Uniswap,…
YFI token storage wallet
An ERC-20 token is built on the Ethereum platform so it is quite easy to find popular storage wallets:
- Cold wallet (safest): Ledger Nano X, Ledger Nano S, Safe deposit
- Software wallet (easy migration): Exodus, Atomic wallet,…
Potential evaluation of YFI copper
Perhaps for the first time that a cryptocurrency has compared Bitcoin, the price of YFI has surpassed Bitcoin's at the time of writing. While many other governance tokens may be arguably more speculative, the price of YFI tokens may depend on the total number of assets locked in yearn.finance.
When Binance launched it, YFI quickly jumped 50% in value. And the price jumped 4.000 percent when Uniswap listed it. You can rely on Yearn Finance's products and ecosystem. Hopefully YFI can achieve much greater value and also more widespread application.
Should invest and YFI co
Since its launch, the token has shown growth, and at the time of writing it has achieved a price point above $ 13.000. This price increase has continued over time. It has achieved this even after all tokens have been issued and circulated.
One of the outstanding features is that the circulating supply of YFI is almost equal to the total supply of YFI. According to Coinmarketcap, only 38 YFI tokens are currently not in circulation. Hence, it can be seen that the YFI token has risen since its launch and continues to show rapid growth.
Project resources Yearn Finance
- YEarn documentation: http://docs.yearn.finance
- yGovernance and staking (yGov) - https://ygov.finance
- Pool information: https://yieldfarming.info/
The future of Yearn Finance
The developer of project-Cronje said that DeFi has become too complicated for the average person. Anyone who can simplify the process and provide a better user experience will have a better chance of mass adoption.
Yearn Finance is bringing the level of community governance practically essential for DeFi. Also offers some impressive return on investment with relatively low risk. However, the risk inside DeFi remains high, even within the Yearn Finance protocols.
This is true when you consider your money spent interacting with yGov with BPT tokens. Essentially, you are playing with a derivative of a derivative of an underlying asset. If there's anything wrong in that chain, you risk losing your money.
The future of Yearn Finance is quite long. The project now provides an innovative platform and pushes Defi to new heights. Yearn aims to work efficiently with other Defi existing protocols. Hopefully, the target that the project is aiming at will be further developed and the YFi copper will continue to reach other highs.
This is only a review from a personal point of view. Not investment advice, so please consider before dropping money. Thanks!