What Is $YFI? And The Value Of Yearn.finance?

2020-07-30 09:50:00 · 65 views · 5 min read


$YFI, the token of yearn.finance, price went up from $34 to $4,915 (ATH). Up 251% in the past 7 days.



18th July, a DeFi yield aggregator yearn.finance released its token $YFI. As mentioned by the team, there is no pre-mine, no sale of $YFI. Even for the developers themselves did not get any mined $YFI in advance.

(Source: Coingecko.com)



The $YFI token price drives up the yearn.finance users, transaction and volume at the beginning.

(Source: https://www.dapp.com/dapp/yearn-finance)




So What Is $YFI?


$YFI has the below features:

  • 0 financial value. It has value in its project governance. Owners can vote to change the rules, interest, etc.

  • No pre-mine

  • No pre-sale


The total supply of $YFI is only 30,000 with a circulation supply of 29,798. 


(Source: etherscan.io)



Remembered what we mentioned above right? One of the main usages of $YFI is governance. Yearn.finance left the decision to the whole community. The latest news regarding governance is, in the recent yearn.finance #0 governance proposal about whether to increase the total supply of $YFI, the proposal was not approved by the community. So people who support for increasing the total supply of $YFI do a fork of $YFI and make it a new project called YFII. $YFII token price went up from $460 to $1131 (ATH). Again, so as its users and transactions.

(Source: https://www.dapp.com/dapp/yfii)



How to earn $YFI?


The only way to earn $YFI is to provide liquidity to one of the platforms below, stake the tokens in the distribution contracts and users will earn an amount per day. Again, the whole community can change the amount of token issue per day.


  •  yearn.finance

A DeFi yield aggregator. Current AUM $8m having earned in aggregate 10.58% APY for liquidity providers since launch. yearn.finance does profit switching for lending providers, moving your funds between dydx, Aave, and Compound autonomously.


  • ytrade.finance

A DEX that users can trade stable coin $DAI, $USDC, $USDT, $TUSD, and $sUSD at leverage. Yet to be launched publicly.


  • yliquidate.finance

Automated liquidation engine for Aave protocol. Allows 0 capital liquidations on a first come first serve basis.


  • yleverage.finance

Creates 5x leveraged DAI vaults with USDC.


  • ypool.finance

The first y.curve.fi <> sUSD curve.fi meta pool. Decommissioned currently in favor of a native asset pool. Before decommission had over $10m in assets.


  • yswap.exchange

The latest release, announcing a stable automated market maker.


  •  *.finance

Yet to be launched publicly, credit delegation protocol for the smart contract to smart contract credit delegation lending.



The whole system is super complicated with all the 7 platforms above, here we would like to focus on one of the most famous DeFi product yearn.finance to give some brief ideas about what it is.




What is Yearn.finance?


Different from normal AMM (Automated Market Maker), the yearn.finance team gives their solution a new name as “a new yield aware AMM” . The logic and system is super complicated. So here we would like to explain it easier for you.



It is an automated market maker. The system integrated with a lot of DeFi products such as Compound, Aave, Uniswap, etc, then it will do DeFi yield farming in all those DeFi protocols and earn profits from it.



What is yearn.finance’s “new yield aware AMM” different from other current AMM? This “new yield aware AMM” helps users to earn interest from interest, which will definitely enlarge the profits. 



What’s more, in the normal AMM, users need to over-stake DAI and when the staking rate of DAI is low, it will be liquidated. Yearn.finance solves this problem. And users do not need to provide at least 2 tokens in order to create a new pool.



Yearn.finance is the only recent project that the team does not have any $YFI tokens nor the real control of the project. However, some of the risks involved are:

  • $YFI staking contract hasn’t passed audit yet

  • The community made the wrong decision. This is also the problem of decentralized governance.



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