What is yEarn.Finance? How to Earn from yEarn.Finance?
yEarn.Finance
Decentralized Finance (DeFi) is the one that has captured the attention of crypto investors. People are going crazy about the new features of DeFi.
yEarn.Finance has risen to be one of the hottest players in the DeFi Ecosystem. yEarn.Finance is a yield aggregator that provides automated yield farming strategies to the yield farmers and liquidity providers. This project has the potential to earn higher returns. Yield Farming is a method of generating passive income for the yield farmers.
Similarly, yEarn is also one of the largest sources for generating passive income. With yEarn.Finance, users can use multiple DeFi platforms to generate the highest yield possible. It means users can use the DeFi lending platforms like Compound, Aave, dYdX, and Fulcrum to lend their assets and generate higher yields. According to DeFi Pulse, at the time of writing, yearn.finance has $170.2 million assets locked up.
Now, let’s understand more about the history of yEarn, its tokens, and much more in this article.
History
yEarn was previously known as iEarn. Andre Cronje is the mastermind behind the creation of yEarn. Andre Cronje recognized that yield farming is very complex and this complexity will increase over time. Yield farming allows the user to combine multiple lending platforms to earn more profits.
When these lending platforms are combined, it becomes harder to assess if the users are actually making profits. So, Cronje wanted to implement a new product that would simplify this process and allow the user to seed the yield farming strategies rather than manually choosing between them. So, he proposed yEarn.
What is yEarn.Finance?
yEarn acts as a decentralized aggregator for all the yield farming strategies. yEarn Finance allows its users to combine different decentralized platforms to optimize their yield farming results. Whenever a user deposits tokens into the decentralized platform, the tokens are converted to yTokens.
These yTokens are regularly rebalanced to help the user choose the most profitable DeFi services. Curve is the leading integrator of yTokens. It has created an Automated Market Maker (AMM) between yUSDT, yUSDC, yTUSD, yDAI tokens. Curve also allows users to earn lending fees and trading fees simultaneously.
yEarn Products
In the yEarn.finance ecosystem, the creator, Andre Cronje allows users to benefit from the yEarn products as well. Although yEarn is yet in the beta version and it has to overcome some shortcomings, yEarn.finance still has a bright future. The yEarn products are described below:
yTrade.finance
DAI allows the use of currencies such as $USDC, $USDT, $TUST with a leverage rate of up to 1000 times. If the user does not want to pay the transaction fees and wants to trade for free, then they can use the leverage ratio of 250 times at most.
yLiquidate.finance
yLiquidate.finance is an automated liquidation engine for Aave users. They allow 0 capital liquidations on a first-come-first-serve basis.
yLeverage.finance
yLeverage.finance allows the users to use the USDC as an underlying asset in DAI Vault to take positions with a 5-fold leverage ratio.
ySwap.exchange
ySwap.exchange offers a stable Automated Market Maker (AMM) which provides unilateral liquidity.
iPool.finance
iPool.finance is the first pool to switch between y.curve.fi and sUSD curve.fi pools.
*.finance
This is a new yEarn product which has to be named yet. This product will be available for all the Aave users who are attracting credit.
YFI Token
On July 18, yEarn.Finance has released its governance token, $YFI. The YFI token is distributed to those users who provide liquidity to any of the platforms using the yTokens. YFI is the most decentralized token as it does not have any intrinsic value. The main intention of creating the YFI token is to surrender the governance of the yEarn system to the community.
Andre Cronje states that:
“In further efforts to give up this control (mostly because we are lazy and don’t want to do it), we have released YFI, a completely valueless 0 supply token. We re-iterate, it has 0 financial value. There is no pre-mine, there is no sale, no you cannot buy it, no, it won’t be on Uniswap, no, there won’t be an auction. We don’t have any of it.”
But, the community did not agree with Cronje, as the token has risen from 0 to $4,000. Various exchanges like Uniswap, LBank, MXC, Poloniex, and FTX support the trading of $YFI token. The users can earn the YFI tokens by providing liquidity to the yEarn products.
How to Stake yTokens?
The users can stake the yTokens by providing liquidity to the Y pool. Users can visit the Y Pool deposit page which is https://www.curve.fi/iearn/deposit to deposit liquidity.
If the user has his/her Web3 wallet connected with LP tokens in it, then a new “Stake unstaked” button will be available on the screen. The user should click the button to approve Curve and start spending their yTokens. The user can then confirm their staking transaction.
Once it is confirmed, the user will start earning YFI and their staked share will start appearing on the profit page.
How to farm YFI Token?
The users can farm te YFI tokens in three ways:
- On Curve, with the “Y” tokens.
- On Balancer, with the 2/98 YFI/DAI pool.
- On Balancer with the YFI/yCRV pool.
How to buy YFI token?
If the user wishes to buy YFI tokens on the decentralized exchanges, without any account creation/KYC, then the user can use Uniswap, Balancer, and 1inch exchanges.
If the user wishes to use centralized exchanges, then the user can use Poloniex and CoinEx exchanges to buy the YFI tokens.
Which is the best way to buy YFI tokens?
Having known the ways of buying the YFI tokens, the user will be confused with which exchange to use. If the user chooses Balancer, then it will offer higher liquidity because it has a pool that is used to farm YFI. So, if the user wants to buy YFI in large amounts, then Balancer will be a better choice.
But, the downside of Balancer is that it has a gas price which is 3 times more than Uniswap. So, if the user is buying YFI tokens in smaller amounts, then Uniswap will a better choice providing better returns and affordable gas fees.
In case the user is buying directly on the Uniswap or Balancer exchange, we suggest to check on 1inch before taking any step further. It is because 1inch tells which is the best execution to trade. Also, 1inch is very good at converting the crypto via the best possible execution using multiple decentralized exchanges.
Ultimately DeFi exchanges work better than centralized exchanges. It is because the user can execute the trade directly from their Web3 wallets like Metamask or Ledger instead of creating an account, performing KYC, withdrawing limits, etc.
YFI Price Analysis
The YFI token came into existence on July 18 with a price of $34.53 and a trading volume of $7,979.11. On August 07, the token saw its highest price of $5,198.34 and a trading volume of $20,958,704. YFI has a circulating supply of 30,000 coins and a maximum supply of 30,000 coins. Uniswap exchange is the most active trading exchange. To explore addresses and transactions, users can use etherscan.io.
The price of the token depends on the demand. The supply is deficient and because of this, the token price is highly volatile. It’s tough to predicate the price of the token in the long term. Enjoy the rides and cash out the profits you make.
Final Word
yEarn transforms DeFi to a whole level. It is because of the yEarn.finance services which enable the users to capture the rate of income that they will never be able to catch on their own. Users who earn good returns from various DeFi platforms through yearn.finance can also earn YFI tokens. yEarn.finance aims to help the yield farmers and liquidity providers to make the most of their tokens. It also allows users to work with multiple DeFi platforms at the same time.
