Yearn Finance already has a reputation as one of the most decentralized DeFi projects. Some even consider it the most decentralized blockchain project so far.
This protocol allows yield farmers to make the most of their investment by revealing the most profitable lending or borrowing option for them.
Yearn.finance is built on the Ethereum blockchain and simplifies user interaction with other DeFi protocols and maximize the annual percentage for liquidity providers.
What Is Yearn.finance (YFI)?
Yearn.finance (YFI) logo
YFI pronounced as ‘waifu’ is an ERC-20 coin used as a governance token for the protocols on the yearn.finance ecosystem. There are currently 30,000 YFI tokens in circulation and they can be earned by interacting with any of the protocols on the yearn.finance ecosystem.
It is important to note that these tokens were launched without an ICO, pre-sale, or pre-mine. You just need to provide liquidity on any of the protocols on the ecosystem and get some of the governance tokens. You can also buy from any of the big exchanges.
You can also earn YFI by depositing a mix of DAI and YFI into the Balancer protocol in exchange for BAL tokens. After that, you deposit the BAL tokens into yGov in exchange for YFI tokens.
There’s also a third method for earning YFI tokens. This method involves putting in a mix of YFI and yCRV into Balancer in exchange for BPT (Balancer pool tokens). These tokens are then put into yGov to get YFI tokens.
Owning YFI means you have a stake in deciding the future of the protocol in terms of upgrades to the platform. Proposals for upgrades are brought up and votes are cast to decide if the upgrades will be done or discarded. 1 YFI token equals 1 vote.
A proposal can be vetoed if more than 25% of YFI holders vote in favor of it. However, the proposal has to get 33% approval from YFI holders before it can be ranked for voting.
The proposal still needs at least 50% votes from YFI token holders for the proposal to pass and changes implemented.
However, there is a twist to the governance model on yearn.finance. Only YFI holders who have deposited their BPT tokens into the yGov governance pool are eligible to vote.
YFI token holders can burn their YFI tokens in exchange for an equal percentage of funds locked in the yearn.finance rewards pool.
The YFI token is currently one of the most valuable DeFi tokens in the market. This is because it governs one of the most popular protocols in the industry.
At the time of writing, YFI is traded at $23,112 USD on major exchanges.
A market capitalization of $701,227,786 USD makes it the 36th most valuable cryptocurrency on CoinMarketcap.
YFI tokens have a 24-hour trading volume of $743,207,308 USD.
The total supply of YFI tokens is 30,000 YFI, with 29,968 YFI in circulation.
What is the use of Yearn.finance (YFI)?
When users deposit their tokens into yearn.finance, the tokens are converted to yTokens.
The yTokens are rebalanced to select the most gainful lending services for yield farmers who provide liquidity on the platform. Yearn protocol integrates with some of the most advanced automated market makers like Curve.fi to help liquidity providers earn not just lending fees but trading fees on the platform.
The Yearn.finance ecosystem is made up of several other platforms like ytrade.finance, yswap.exchange, yearn.finance, yliquidate.finance, and iborrow.finance.
Ytrade allows users to long or short stablecoins with 1000 times leverage. Yswap is live on the platform now, it serves as a source where users deposit funds between various DeFi protocols.
iborrow.finance helps users tokenize debts in other protocols. This is done with the assistance of Aave so the tokens can be used in other DeFi protocols.
Yliquidate.finance uses flash loans in Aave (another DeFi protocol) to liquidate funds. For now, only two of these protocols are live: yearn.finance and yswap.exchange.
The other DeFi protocol: yearn.governance created a governance token for the yearn.finance protocol.
Who created Yearn.finance (YFI)?
YFI was created by Andre Cronje; an eccentric and terrific computer programmer. Cronje dropped out from college where he was studying law to learn computer science. He completed a 3-year course in 6 months and delved into the private sector even after getting an offer from the college to teach computer science.
He later got fascinated with cryptocurrency and he began working closely with Curve Finance and Aave to create what would be known as iEarn.
As we can see, iEarn would later transform into yearn.finance. Cronje mostly programmed the entire protocol himself. Yearn.finance was launched in July 2020.
What Is the future of Yearn.Finance (YFI)?
Given that this protocol has been in existence for just a few months, the future of yearn.finance isn’t exactly clear. However, the present situation of the protocol and the enthusiasm around the YFI token has pushed the value of the token up.
Andre Cronje is probably one of the most intelligent and also most radical blockchain programmers out there. He already gained prominence on medium reviewing smart contract codes before he created yearn.finance.
He also built the most decentralized DeFi project in existence. He left the daily operation of the platform to the community because “he was too lazy” to do it.
Yearn.finance has gained popularity among yield farmers and Liquidity miners in just a few months of existence. With new features to be released soon and a fork of the governance token, we are expecting a platform that will be a leader in the DeFi space.