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yearn-finance

What Is Yearn.finance? How To Buy, Expectations And Predictions. Everything You Need To Know About YFI

In this article you will learn more about Yearn Finance (YFI): the protocol that facilitates access to Yield Farming. It offers unique capabilities to users through its ecosystem based on Decentralized Finance (DeFi). Considered the ‘Amazon of the DeFi’, it relies on complex strategies that maximize user returns in proportion to risk.

What is Yearn Finance (YFI)?

Previously it was known as iEarn. Now called Yean Finance, it’s a protocol that solves a long-standing problem: the accessibility of Yield Farming. This technique exists by using arbitration. This means that by playing with the rates of the different protocols, money can be earned. There are also other activities to take advantage of, such as providing liquidity in a protocol.

You can run your crypto coins on a single pool, or you can search for the best returns on the different platforms ( AAVE , Curve.Finance, etc. ). However, this takes a considerable amount of time. That’s why Yearn Finance will manage your money with the sole purpose of getting the best return.

When it entered the crypto market, YFI had no specific role and was only used for speculation. It quickly reached the price of Bitcoin at that time and then surpassed it and reached its highest point (ATH) at $43,678, in September 2020. However, the token loses its value very quickly due to the lack of a concrete project. The management of the project is in the hands of the holders of the YFI token.

There are many protocols and projects that benefit from Yearn Finance. Think of Sushiswap , Cream Finance and Keep3rV1. And that’s not surprising, because the decentralized exchange (DEX) Sushiswap saw its trading volume double within a few days. So it makes sense that they are extremely happy with Yearn Finance.

The Yearn Finance team

The YFI team consists of 3 developers, who can be considered experts in the field of Decentralized Finance ( DeFi ). The team consists of Banteg Milkyklim and Tracheopteryx (these are all pseudonyms).

Other members are Andre Cronje (the creator of the project) who is now responsible for the development of the protocol together with 4 other people. There is also a more discreet communications team.

The advantage of this team lies in its popularity and experience. Andre Cronje has been named ‘DeFi Personality of the Year 2020’ by Defiprime and the highly regarded magazine CoinTelegram. His partner Banteg has subsequently been named and recognized as one of the DeFi’s top talents: the top spot could be awarded to him in 2021. So it is more than obvious that the Yearn Finance team consists of experts. It says a lot about the opportunities and potential of this protocol, and therefore also about the value of the token.

Yearn Finance’s partners

There are several companies that have decided to partner with Yearn Finance. That is not surprising, because it is one of the largest systems in the world of Decentralized Finance. The purpose of the system is therefore to ensure that different systems in the DeFi world are connected to each other.

  • Cream finance is a lending and trading platform that runs on Ethereum and Binance Smart Chain. It combines many aspects of DeFi: borrowing, tokenization, derivatives, etc.
  • Cover Protocol is a peer-to-peer insurance marketplace. It has two other functionalities: providing liquidity and using the prediction market (betting). However, Cover Protocol and Yearn Finance have separated since March 5, 2021. However, this did not affect those who had already used Cover Protocol.
  • Keep3r Network is a job platform. A custodian is appointed, which is a person with strong technical skills who will perform an action assigned to him. This action is called a Job.
  • SushiSwap has grown to become the second largest decentralized exchange (DEX) in terms of volume. It stands behind Uniswap and has one of the best reward systems in the DeFi.
  • Pickle Finance wants to be the protocol that will balance the rewards of liquidity pools. Instead of receiving deposited currency, it offers PICKLE tokens that will be used for governance.
  • Akropolis is a project that aims to simplify borrowing and borrowing through a user-friendly interface.

The characteristics of the Yearn Finance protocol

Let’s take a look at the key features of Yearn Finance. That makes it a lot easier to understand how this protocol works and what it could be used for.

The safe

The Yearn Finance vault generates capital depending on market opportunities. The user’s money is automatically transferred at a lower cost. So even with very limited DeFi or mining skills, the user can participate in the decentralized financial system. Yearn charges a 0.5% withdrawal fee. In addition to stablecoins , you can also deposit other cryptocurrencies with the protocol, such as: Bitcoin, AAVE, Ethereum, ChainLink , Wrapped Ethereum and Wrapped Bitcoin.

Insurance

Yearn Finance has a mechanism to cover large losses through smart contracts . This feature is managed by Nexus Mutual; the largest insurance platform on the Ethereum blockchain . If there is a claim for damages, it will be the token holders of the YFI who will vote for the recovery of the assets contained in the insurance.

ZAP

ZAP is an instrument that allows trading in and out of the liquidity pools on Curve.Finance. Usage is limited to five stablecoins: USDT, USDC, BUSD, DAI , TUSD. They are then placed in two pools: y.curve.fi or busd.curve.f. This is a very expensive solution in terms of cost, but it allows the users to quickly enter a position using a single trade.

EARN

There is also a loan feature that allows you to deposit money in different protocols. This will be automatically distributed according to the highest interest rates of the platforms (AAVE, dYdX and Compound ). FYI, the annualized return on this position has increased to 9.11%. That is a considerable return, which many of the users are happy with.

What is YFI used for?

Yearn Finance’s token, YFI, is used to manage the protocol. It allows users to vote on proposals, as well as receive cash flow from the fees collected by the protocol.

In April 2021, there will only be 36,000 YFI tokens, which is anything but a lot. On July 17, 2020, these tokens were distributed to the first users of the protocol. The price of the token at that time was about $850 each. The value of the token has already risen to $ 44,000 in less than a year.

Since October 2020, the number of addresses with YFI has continued to increase. This growth is sustained and encouraging for the development of the platform as it demonstrates the interest users have on Yearn Finance. And that is of course important for the future of Yearn Finance.

YIP-57

Prior to February 2 at 6:00 PM UTC, all protocol contributors were not rewarded for the work they did. This meant that the YFI developers controlled only a tiny fraction of the total supply. However, something had to change, so the team came up with a proposal called YIP-57.

The aim of this proposal was to send 6,666 new YFI tokens into the world. The distribution would be as follows:

  • 1/3 will be used to reward current donors.
  • 2/3 will be kept in YFI’s treasury.

The tokens placed in the treasury were reserved for future contributors through liquidity extraction programs, staking, protocol mergers, and encouraging inter-protocol use. This will enable closer collaboration in the Yearn Finance ecosystem.

This proposal was subsequently approved with 83.46% of the votes in favor (about 1,670 YFI) and 16.54% against (about 331 YFI). Its proponents cited the following benefits:

  • It rewards the loyalty of existing contributors
  • It is an incentive for new contributors to contribute and Yearn’s treasury that will enable it to support growth.

Those who voted against YIP-57, on the other hand, point out that the token is losing its speculative aspect due to the increase in overall volume. There were several experts who agreed with those who voted against. Still, the proposal was adopted, bringing more than 6,000 YFI tokens to the crypto market in 2020.

Yearn Finance (YFI) token

Yearn Finance’s token is called YFI, and it runs on the Ethereum blockchain. It is therefore an ERC-20 token, like most tokens. The benefits that the blockchain of Ethereum offers ensures that many crypto projects run their protocol and software on their blockchain. That’s exactly why the Yearn Finance team decided to do the same.

How can I buy YFI?

With a capitalization of more than a billion dollars, the YFI token is available on a large number of platforms, including: Binance, Coinmerce and Bitvavo . We recommend that you use a major crypto exchange , because the liquidity is a lot higher. You can therefore buy and sell the tokens for the best price on these platforms. It is also a lot safer to use, for example, Binance or Bitvavo.

If you know a little more about crypto trading , you can also choose to buy YFI on a decentralized exchange such as Sushiswap, Pancakeswap or Uniswap. However, you have to go through more steps here, which also makes it more difficult to buy the token. The chance that something will go wrong is many times greater on a DEX than on a large crypto exchange.

How can I store YFI tokens?

Since YFI is an ERC-20 token, there are many options for storing the tokens. You can store them in almost any wallet, such as MetaMask or Ledger. You can also stay in the DeFi ecosystem by using the Silver wallet, which allows you to participate directly in ‘Yearn V1 Vaults’. It can be difficult for beginners to use this wallet. Still, it can bring you a lot, because by using this wallet you benefit even more from the advantages that the protocol offers.

However, we recommend that you use a hardware wallet . And that has a reason. A hardware wallet (also called a cold wallet) is a lot safer than a hot wallet (software wallet). This is because a hardware wallet is not continuously connected to the internet. Hackers cannot access your YFI tokens when the wallet is not connected to the internet. Of course you have to keep the hardware wallet well, so that you do not lose it, and so that no one else can access the hardware wallet.

Yearn Finance (YFI) Rate

Conclusion

There’s no getting around it: the launch of Yearn Finance was a great success in every way. Unfortunately, the protocol has not yet fully succeeded in attracting new users, despite the strength of the community. With the new Proposition 57, the project becomes more mature by putting the user in the center again. Yearn Finance has also already chosen to print additional YFI tokens (about 6,000). They did this to better reward users of the platform.

It is clear that the team is continuously owning with optimizing and improving the project. That is of course good for the project, and its users. Because when a project continuously improves, it can also adapt itself much better to the changes in the market.

We will find out in the coming months and years how this protocol will develop itself. However, the future looks rosy. Nevertheless, we recommend that you do good research into YFI yourself, for example by using technical analysis or fundamental analysis. Based on your own research, you can then decide whether it seems wise to invest in YFI. Therefore, do not take any action based on the statements of others.

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