This means that it capitalizes on other protocols like the stablecoin decentralized exchange (DEX) Curve, lending/borrowing platforms Aave and Compound, the DAI-issuing protocol Maker, and more. Yearn’s platform is designed to collate reward-generating opportunities across DeFi. Although it was built on Ethereum, it has expanded to include support for other chains including Fantom and layer 2 solutions like Arbitrum and Optimism. Yearn has continued to grow despite the departure of its founder, and its community has guided the project into a period of stable operation. Despite its meteoric rise, Cronje announced in October 2020 that he would be leaving the project and DeFi altogether, but later would work on other projects like Fantom-only to step away again in 2022.Īlthough many projects reserve some of its supply of tokens for founders, investors, and the development team, Yearn approached its YFI token distribution with a “fair launch.” Through this process, all YFI were distributed to users of Yearn for providing liquidity or staking through the platform. Originally named iEarn.finance, the project saw almost immediate success, with its YFI token-released in July 2020-reaching a market cap of over $1 billion by August that year. Yearn was initially launched in early 2020 by South African computer scientist Andre Cronje, who is also known for co-founding the Fantom blockchain. Yearn’s Ethereum-based token, YFI, allows its holders to participate in governance and decision-making on the platform. This makes its platform a yield aggregator.Īlthough users can manually try to find opportunities like this across DeFi apps (called yield farming), Yearn instead allows them to deposit funds into vaults, called yVaults, which use different strategies in an attempt to earn passive income on their crypto holdings. Yearn Finance (sometimes stylized yearn.finance) aims to find the best opportunities for rewards and assemble them into one easy-to-use place for DeFi users. Reward-generating strategies are some of the most popular ways to use DeFi, whether through decentralized lending and borrowing, providing liquidity to an automated market maker platform, or seeking out the highest incentives offered by DeFi protocols. Last week, investors piled into the radical project YAM, only for a bug to crash the network -and its price.Decentralized finance (DeFi) gives crypto users multiple opportunities to increase their crypto holdings. Plus experimental DeFi projects are risks. Not to mention that even YFI’s developer Andre Cronje himself didn’t see any profit from his creation, leaving the platform’s governance completely in the hands of its community. There was almost never enough supply available, and the folks who were able to ‘yearn’ enough of them, did so via providing millions in liquidity,” pointed out Dennison Bertram, a former developer advocate at security audits firm OpenZeppelin. So I don't think it turned too many people into millionaires if any to be honest. Simultaneously, looking at YFI’s rapid growth, crypto enthusiasts shouldn’t beat themselves over “missing the gravy train.” Thanks to the token’s small supply cap, it’s rather unlikely that YFI made a lot of people millionaires in just a few months, some experts argue. But it also means that if they all suddenly sell-it could crash the price. Since yield-farming allows holders to receive interest “out of thin air” by staking and lending their tokens, the majority of them aren’t really in a hurry to part with their assets. What this means is that more than half of YFI are not liquid and don’t participate in trading, thus the demand for tokens far outweighs the available supply, driving the price up. >60% of total supply is locked in staking pools. If you're wondering why YFI keeps pumping, consider this:
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