July 2, 2023
4 min read
We must admit that hundreds of new cryptocurrencies are deployed in the space almost every day, and while some earn the spotlight; they don’t do so for long. Yearn.Finance is on a different level, though, and is seen as the magic door to the DeFi space that the mother of smart contracts- Ethereum gave to us. In this article, we will be taking a look at Yearn.Finance or YFI for short. So what is YFI? Well, Yearn.Finance can be thought of as a portal that gives users the ability to access and invest in many different assets and products, all from one platform.
They bundle decentralized finance (DeFi) products into one package for investors or users. The algorithm then automatically chooses the best rewards upon investing, so investors would effortlessly earn interest in their investments. yEarn was launched on the Ethereum blockchain and had been making waves in the industry ever since its launch. Let’s take a deep dive further into what YFI or yEarn as it is sometimes referred to. One key thing to note is that Yearn works as a yield aggregating platform by effortlessly maximizing investments for the highest yearly yield or annual percentage yield (APY) possible. The platform allows an investor to enter various vaults or pools with ERC20 stablecoins such as DAI, TUSD, USDC, USDT, or SUSD.
You can think of Yearn.Finance Company/Ledger as an all in one blockchain solution to maximize investors’ gains over time. This is done through what is known as crypto staking or locking up tokens, as mentioned earlier. The company offers various services on its blockchain ledgers like yield farming, coin swapping, profit switching, and insurance. Users of the platform are exposed to all these options and decide on which they want to participate.
With most cryptocurrency protocols, there is a coin or tokens associated with the project. In this regard, yEarn adopts the YFI token, which is used to create a standard currency for the platform users can rely on when doing various transactions. Users who lockup their stable coins will earn YFI tokens in return that they can sell on various markets or exchanges. We have mentioned that yield farming is a feature of the Yearn platform, and this is a clear example of what that is. Locking up tokens to earn more YFI is essentially yield farming.
Due to the high quality of the Yearn.Finance project, one would believe that it is not new to the crypto space and have years of development backing it along with the team. While not aiming to ‘burst any bubbles’ here as solid and well-built as YFI is, it is a relatively new project but has done extremely well so far. YFI entered the crypto space in little under a year ago, in July 2020. It truly deserves the recognition it is getting thanks to the founder and lead developer of the project- Andre Cronje. He is a well-respected individual who created some of the best projects to date, such as Keep3rV1 (KP3R), for example.
Back in July 2020, Yearn.Finance surpassed bitcoin in terms of price but not market cap. It was valued at more than 25,000USD, which attracted a huge crowd to grab a piece of the value of this so-called ‘DeFi gem’ at the time. During one particular week, Yearn.Finance grew more than 1000 percent and continued to break new records as the project attracted more investors over time.
Other essential team members lead the project to great success, like @doug and @banteg, which are the social media nicknames associated with these individuals. The team has a much wider range of developers and contributors, which is expected due to the nature and quality of Yearn.Finance. When looking at this team, it’s no secret that everyone gets along well from the evidence of numerous tweets and the project’s overall success.
One other crucial aspect that proves this project’s credibility and robustness is the premium quality partnerships they have lined up. Partners of yEarn include Powertool, Cover Protocol, Aavee Lend, Cream, Sushi Swap, and Akropolis, who are top players in the crypto space and, particularly, the DeFi marketplace. These are only a few of their recent partners since it’s a relatively new project. It is certainly expected that yEarn will attract a lot more partners in the future.
Without a doubt, Yearn’s technology is cutting edge, especially because a user gets exposed to a variety of decentralized finance (DeFi) products. When it comes to decentralized finance in the crypto space, it is very important to every investor since they can multiply their investment. Upon launch, FYI has proved to be a very valuable project that sets the pace for other quality products in the crypto sphere to follow. There are some key advantages and features that make Yearn.Finance important. These will be looked at more in-depth, along with some disadvantages of this particular cryptocurrency.
The main features of the Yearn platform are unique. Firstly, the platform automatically transfers an investor’s funds between various platforms such as Compound, Dydx, Curve, or Aave to bring the highest and most profitable returns on their investment. One other feature of this cryptocurrency is the token’s governance feature, which gives users the ability to vote on upgrades and updates for the project. Not every cryptocurrency allows the input of its token holder in the direction of the project.
Lastly, Yearn allows users to earn through yield farming. This is the popular way to earn passive income by locking up cryptocurrencies for a particular time. The platform also seeks to ensure that investors are exposed to many products to earn the highest yearly yield that is possible. The vaults are where investors’ funds are held and are similar to a pool of funds contributing to the network.
Since many investors have funds in their wallets that they are not using, it just sits there and does not do anything. This is especially true since the cryptocurrency market is very volatile, so investors will be holding stablecoins at some point. If these investors utilize Yearn.Finance gives them a competitive advantage that they can leverage by locking up their stable assets, for instance, and earn interest on them in YFI tokens. Moreover, Yearn. Finance’s platform exposed investors to a wide variety of decentralized finance (DeFi) products through one platform. Therefore, an advantage of this is that investors can choose a suitable product instead of trying a lot of products on the marketplaces. So this essentially minimizes their risk of investing in a poor quality project.
Even though there are not many downsides to using yEarn, it is important to know that with every project comes some drawback or disadvantage that users must consider before investing. With any staking or locking up of funds on a platform, investors are taking a risk to earn rewards. Of course, if the project is high quality and the team is public, that adds a great amount of credibility, but they still leave some risks involved with market uncertainty.
The other disadvantage here is that Yearn.Finance is a relatively new project, so that also presents some level of risks to investors. It certainly will need some more time to prove itself. However, it is doing very well at the time of writing. While the future looks bright for this project, we never know exactly what it holds. Hacks are another major drawback that occurs in the crypto space, and though it has been close to a year now, yEarn is still a DeFi project, and these are currently the most hacked in the crypto space. Finally, we need to remember that YFI is considered an experimental platform likewise most of its competitors. This means that there are no guarantees that it will always work as expected, and here lies another type of risk that investors will DeFinitely have to keep in mind.
At this point in the world of crypto, we must look at the fact that it’s certainly not easy accurately to identify or assess the future path of any project. However, there are some exceptions and Yearn.Finance is one such project. We can safely argue or posit that yEarn has brought all eyes on the DeFi space so that investors can realize that there is a lot of value available for them to tap into. This can only be done through decentralized, high-quality projects such as Yearn, and that’s what it brings to the table. Furthermore, this allows individuals to manage and maximize their crypto assets by earning interest.
As YFI continued to grow and attract more investors over time, it became clearer that it would be in the top 100 projects in a very short space of time. It also got listed on numerous high-quality exchanges with little effort from the founder-Andre Cronje, since centralized exchanges began to realize the value that this project brought to the cryptocurrency space. Yearn.Finance is currently listed on Coinbase Pro, Binance, Huobi, and Kraken, just to name a few. From a theoretical standpoint, it is no secret that projects like YFI are what investors are looking for to have a stable and passive income platform that is generating interest and automatically locating the platforms with the highest return on their investment.
During the growth and development, the crypto space got introduced to new dimensions and possibilities. Thanks to Yearn.Finance, what we can summarize from this is that the potential of the decentralized finance (DeFi) space is essentially endless. There are no boundaries that innovation must adhere to, and that presents a clear and bright future for cryptocurrencies and particularly Ethereum since it’s the mother of DeFi.
Yearn.Finance is a top-tier project, so it has a lot going on for it, and it’s certainly not short of a great community. Yearn.Finance social media and accounts can be found by visiting the following links:
Our final thoughts here are that the crypto space is always evolving as innovation keeps the wheel spinning day in and day out with new products. Yearn.Finance is one of the projects that massively contributed to the decentralized finance (DeFi) space and Ethereum by bringing more value to the network. This sort of fuel is very important for Ethereum and other DeFi projects alike since Yearn.Finance gives them more exposure through the platform.
It’s important to note that YFI is something new to space, but it has truly set the bar for other DeFi projects to follow. There is no way but forward to a high-quality project like this, and it is believed that we are only just getting started. What’s left to come from the team will be very important for all investors of yEarn and the overall cryptocurrency space.
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