Yearn.finance (yEarn) is a yield aggregating platform developed by Andre Cronje on the Ethereum blockchain. yEarn is an ecosystem of protocols that aims towards optimising yields for its users by utilising DeFi protocols such as Compound, Aave etc.
Whenever a user deposits their stable coins like USDT, USDC, DAI etc. into the yEarn platform it converts them into yTokes like yUSDT, yUSDC, yDAI etc. These yTokens are then routed across the DeFi space to pool liquidity.
yPools have earned some of the best returns in 2020, leading to some people calling it the Bitcoin of DeFi.
YFI is a native governance token in the yEarn ecosystem that was aimed to be used for voting only and not as a means of exchange. But, it turns out that the token is listed on UniSwap and Binance and both the time when the token was listed we saw a tremendous surge in price.
In the last week of August, the token successfully surpassed $1.1 billion in market capitalisation.
Individual YFI token price has surpassed that of Individual price of Bitcoin.
What makes the token unique is that its supply is only limited to 30,000 tokens, and the protocol works on a decentralised governance mechanism where every token holder has all governance rights with no founder reward.
YFI's growth can be partially attributed to the recent boom in the DeFi space and also because of the tokens' very own highly scarce nature. The total supply of the token is limited to 30,000 only out of which 60% of them are locked in various staking pools with less than 50% of the tokens left for trading. The shortage of tokens for trading and massive demand from the people is one of the factors driving the price.
Multiple protocols provide yield returns on the capital that you lend but YFI optimises and automates the process so that the user gets maximum yield.
The early users of the protocol were able to capitalise on the 2000% + APY. In less than a month after the token hit the market, it struck an astounding price of $4900 and continued to show an uptrend with slight pullbacks.
The YFI token in itself has zero financial value; the leverage that the token holder gets is that they have the power to govern the network along with other token holders. YFI is essentially the reward for the yPool and to earn YFI, one has to provide liquidity to the yearn.finance platforms by staking the output tokens in the distribution contract.
You can also buy YFI on CoinSwitch Kuber that has listed a bunch of DeFi tokens on their platform including the most trending YFI.
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