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Yearn Finance is considered as one of the largest sources of passive income by most of the investors. It has drawn attention due to its potential high returns. It currently has over more than $113 million worth of assets being locked up in its platform.

Yearn Finance is often referred to as one of the most decentralized projects in the cryptocurrency platform.

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In this article, we will provide detailed information about Yearn Finance and its overall aspects. Let us look into this Yearn Finance review in detail now.

Background

Yearn finance was founded by Andre Cronje. It was previously known as iEarn. In the early days, Cronje had understood that the yield farming had become more complicated. He also anticipated that it would continue its complexity over time.

In order to stack up more earnings, people wanted to combine multiple lending platforms. They found it difficult to make profits due to its accessibility. In regards to this, Cronje decided to develop a product to make the process simpler. Thus, This led to the development of Yearn finance.

What is Yearn Finance? 

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Yearn finance is generally a platform composed of the protocols built on Ethereum. It increases the annual percentage yields (APY) of the cryptocurrencies which are deposited into the DeFi system.

yEarn offers a decentralized platform of yield farming opportunities. By combining the different platforms, it helps the users in optimizing their yield farming results. As a user deposits tokens to the platforms, they are converted to yTokens.

The leading integrator of yTokens is Curve as it has created an Automated Market Maker (AMM) between yUSDT, yUSDC, yTUSD, yDAI

Yearn Products

There are 5 major types of Yearn Products offered which can be listed as below:

1) Ytrade.finance: This allows you to leverage trade up to 1000x with the initiation fee and 250x without the fee. Supported currencies tokens include $DAI, $USDC, $USDT, $TUSD, and $sUSD.

2) Yearn.finance: This allows profit-switching between different Defi platforms like Aave, Compound, Curve, etc. autonomously.

3) Yliquidate.finance: This offers an automated liquidation mechanism for Aave. On a priority basis, YLiquidate allows 0 capital liquidations.

4) Yswap.exchange: The Yswap exchange offers a stable AMM, which allows single-sided liquidity provision.

5) Yleverage.finance: This enables the creation of a 5x leveraged Dai vaults with USDC

How does Yearn Finance work?

The working of Yearn finance is easier to understand compared to the other Defi projects. It works by moving the stable coin funds between different projects such as Aave, Compound, and DyDx.

This moving of the stable coin depends on that stable coin which is generating the highest APY. The currencies which yearn finance supports currently are DAI, USDC, USDT, TUSD, and sUSD. These supported currencies are likely to change over time as the protocol is governed by the community.

Whenever a user initially deposits a stable coin into Yearn finance, it is further converted automatically to a similar amount of tokens. These are commonly known as “yield optimized tokens”. This can be further used to earn the YFI Tokens.

YFI token

YFI token is the native token for yEarn. It was previously known as iEarn. The users or the token holders enjoy the access to voting or participating in the governance decisions of the network. These include decisions such as the supply and the distribution of potential tokens to the users. The token is of no intrinsic value.

The users who provide the liquidity to any of the platforms can get access to the YFI Tokens. It offers distinct features since it has no pre-sale, pre-mine, or even allocation to the founder. It is also considered to be one of the most decentralized tokens which have ever been issued.

Where to buy YFI Tokens

There are basically 3 ways of earning the YFI tokens which can be explained briefly as below.

  • The first method includes the deposit of a mixture of about 98%-2% mix of DAI and YFI into the Balancer protocol. This can be further exchanged for the BAL (Balancer protocol) tokens in return. These BAL tokens are then deposited into YGov in exchange for YFI.
  • The second method includes the deposit of a stable coin into Yearn finance. This is then converted automatically to a similar amount of tokens which can be used to earn the YFI tokens.
  • The third method includes depositing a mix of YFI and yCRV into the Balancer exchange. This is exchanged for the BPT (Balancer pool) tokens. These are then further deposited into YGov to acquire the YFI tokens.

The decentralized exchanges are considered to be the best place to get the YFI tokens.

While considering the centralized exchanges, the only ones currently offering YFI token trading pairs are Poloniex and CoinEx. It should be noted that these offer very limited trading volume.

YFI Cryptocurrency wallets

YFI token is generally an ERC-20 token which is built on Ethereum. This enables to store the token in all of the wallets which support the Etherum based platform. Some of the wallets which can be used to keep your YFI secure include wallets such as Keepkey, Ledger, or Trezor.

If you are considering moving the YFI token around then the software wallets are an ideal option. The noted software wallets for the YFI cryptocurrency include Coinomi (mobile), Exodus wallet (mobile/desktop), and Atomic Wallet (mobile/desktop).

How to Stake YFI Tokens?

  • Navigate to the official website. Ensure to provide liquidity to the Curve’s YPool.
  • Now connect your web3 wallet.
  • Once done, you will be able to get YTokens.
  • Then, a new “Stake unstaked” button will appear. Click it and confirm to spend your yTokens.
  • You can view your share by going on your profile page where it will be reflected.

Yearn Finance Governance

One of the main exciting features of its governance is that the holders could burn their YFI Tokens in exchange for the same amount of funds that are locked in the pool. Its governance system is often referred to as “meta governance”.

It involves a higher risk since the assets are being taken into account by the other Defi protocols that interact with Yearn finance. The users that have deposited their BPT tokens into the YGov governance pool are the ones who are eligible to cast their votes in the Yearn finance platform.

YFI Cryptocurrency Price Analysis

Since its launch, yearn token has shown extensive growth and has now reached an amazing price of 4900$USD. This rise in the price has continued over time. It has achieved this even after all the tokens have been issued and already in circulation.

One of the distinguishing features is that the circulating supply of YFI is almost equal to the total YFI supply. According to the coin market cap, it is found that only 51 YFi tokens are not currently in circulation. Thus as per the data, it is visible that the YFI token has been rising since its launch and continues to show rapid growth.

Conclusion

Yearn finance offers an innovative platform and promotes Defi to an advanced level. It aims to work efficiently with the other existing protocols of Defi. Thus it is considered to be one of the most advanced decentralized projects made to date.

Yearn finance primarily aims to ensure that the tokens are being used to the maximum extent by the yield farmers. It works promoting the users to access multiple platforms at the same time without limiting to any one platform.

FAQ’s

  1. What is Yearn Finance?

    Yearn finance is an ecosystem of protocols built on Ethereum which aims to simplify user interaction with popular DeFi protocols and maximize the annual percentage yields (APY) of cryptocurrencies deposited into DeFi.

  2. What is YFI Token?

    YFI is an ERC-20 token used to govern the protocols within the yearn finance ecosystem. YFI tokens can be earned by interacting with these protocols.

  3. Where to buy YFI Tokens?

    The decentralized exchanges are considered to be the best place to get the YFI tokens.
    While considering the centralized exchanges, the only ones currently offering YFI token trading pairs are Poloniex and CoinEx.

  4. Which are the YFI cryptocurrency wallets?

    The noted software wallets for the YFI cryptocurrency include Coinomi (mobile), Exodus wallet (mobile/desktop), and Atomic Wallet (mobile/desktop).

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