Get to know YFI or Yearn Finance
What is yearn Finance? YFI or Yearn Finance is a yield built on the Ethereum blockchain network.
Andre Cronje created this protocol as a solution to optimizing the return or interest of the cryptocurrency owned by its users.
Yearn Finance is included in the Decentralized Finance (DeFi) protocol or decentralized Finance that offers yield farming. As an aggregator, Yearn Finance also uses other DeFi protocols such as Curve, Compound, Aave, and dYDX to maximize token lending capabilities.
Before Yearn Finance was created, users had to manually check, view the results, and enter their cryptocurrency into the protocols. However, that is made easy with this Yearn Finance.
Simply put, this protocol exists to create a sophisticated bridge that diverts liquidity across various sectors of the DeFi protocol to enable users to get the best possible profit.
So, what makes it able to connect to various protocols? Andre Cronje created a token that can bridge tokens from protocol to protocol called yToken.
How does yToken Work?
When a user saves tokens through Yearn Finance, they are converted into yTokens, such as yUSDC, yUSDT, and yDAI.
From this yToken, the user will get the borrowing fee results and the trading on the protocol he chooses. This process allows Yearn Finance to generate returns annual interest to its users.
Apart from yToken, Yearn Finance also generates money for its users from several other things, such as COMP from Compound and CRV from Curve. Finance, yCRV trading fee, liquidity, ySwap fees, liquidate liquidity bonus, and additional costs.
Many analysts praised Yearn Finance, considering this platform can provide the best loan interest rates.
It doesn’t stop there; Yearn Finance supports stablecoins such as DAI, USDC, USDT, TUSD, sUSD, and many other tokens/coins to be transferred to platforms such as Compound, Aave, dYdX, and Curve. It is up to the platform users to choose pools that offer higher returns. Additionally, Yearn Finance has a token governance protocol that is different from the yTokens.
What is YFI Token?
The YFI token is an ERC-20 token that governs the yearn.finance ecosystem. These tokens are distributed to liquidity providers (LPs) who supply certain yTokens.
This token is not used as a medium of exchange in the protocol but as a voting right.
This YFI token can be obtained using the Yearn Finance protocol or by buying it from global and local cryptocurrency exchanges.
Because the supply is only 30,000 tokens, with one token functioning as a single voice in the protocol, the price of YFI has surpassed the value of Bitcoin, which is the first generation of cryptocurrencies in 2020.
Total Value Locked in Yearn Finance also continues to increase. The reason is that Yearn Finance continues to innovate and create many services on its protocol.
Yearn Finance Protocol Service
Earn
Earn protocol service is one of the services in the Yearn Finance protocol. Users only need to deposit their cryptocurrency to get a return in the form of interest automatically.
Zap
Zap is a service to help users save on gas costs needed to move their cryptocurrency to various protocols more freely.
Vaults
Vault is a service that makes it easy for users to find the best strategy for maximizing profits from deposits made by users while reducing existing risks.
Yinsure.Finance
This is an insurance service from Yearn Finance based on Nexus Mutual. As the name suggests, this system can be interpreted in a simple analogy as an insurance system in the Yearn Finance protocol. This system will reduce the risk of falling in value from pools “suspicious.”
StableCredit
This service is the latest service from Yearn Finance. StableCredit itself will later combine tokenized stablecoin debt, loans, and Auto Market Maker Single-Side. This step was taken to create a fully decentralized lending protocol.
From the beginning of Yearn Finance’s development, Andre Cronje did not focus on changing the value of the YFI token alone. Andre Cronje has aspirations that this Yearn Finance can be adopted more widely and make it easier for users to manage crypto assets.
Apart from the YFI token price, which continues to increase, Yearn Finance developers focus on innovation and adoption of the Yearn Finance service. This makes YFI touted as the most innovative DeFi protocol among other DeFi protocols.
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