Launched in July 2020, Yearn.finance has become a major player in the emerging decentralized finance (DeFi) space offering services such as staking, loan pooling and revenue generation on the Ethereum blockchain. With its most user-friendly and independently provided cryptocurrency trading services, the project uses cryptocurrency ERC-20 Yearn Finance (YFI) to incentivize those locking their cryptocurrency into Yearn.finance contracts through any of the supported platforms such as Balances and Curve DeFi.
Since all protocols run on the Ethereum blockchain, Yearn.finance is backed by developers working on governance proposals voted by YFI owners. The Yearn.finance platform is designed to simplify the process of investing in DeFi products and also allows its users to invest in other DeFi protocols as well as earning a percentage of the platform fees compared to their YFI holdings.
Who is behind Yearn.finance?
Crypto and DeFi veteran Andre Krone launched the Yearn.finance protocol without raising funding through public or private funds. Instead, the software engineer drew on his twenty-plus years of software development experience to first launch the protocol and then issue YFI tokens to retail investors, which are currently limited to 36,666 tokens.
Aside from Cronje’s very rare approach, Yearn.finance has benefited from his previous experience as the founder of the Keep3r Network and his association with well-known DeFi projects such as PowerPool, Hegic, Cover, Pickle and Cream V2. , Sushi Swap and Acropolis, among others. Unlike other founders, Cronje did not keep YFI tokens for himself prior to the launch of the Yearn.finance protocol, believing that on a truly decentralized platform based on blockchain technology, the founder should not stick to himself and dictate his future path.
In fact, the history of Yearn.finance goes back to the efforts made over the past five years to launch cost-effective financial products to the non-banking sector of the global population, and it has been heavily influenced by the efforts in Africa to achieve the same. By choosing to focus on creating value for the integrated DeFi ecosystem of developers, partners, and investors on the Yearn.finance platform, Cronje has given a number of crypto entrepreneurs a fresh perspective on how to build DeFi products for the masses.
What is Yearn.finance (YFI) and how does it work?
The Yearn.finance protocol built on the Ethereum blockchain eliminates the need for a financial intermediary like a bank and gives crypto investors and token holders access to its suite of lending and trading services, including Vaults, Zap, Earn and APY. The Yearn.finance protocol can publish its smart contracts on the Ethereum blockchain as well as other decentralized exchanges it operates on. Delivered through a simplified web interface, Yearn.finance is a radical experience in the world of DeFi with one goal – to maximize the returns of crypto assets to its users.
The most complex product is the Vaults product, which acts as a mutual fund of sorts and has over 50 different vaults or stake combinations in which Yearn.finance users can deposit tokens. These Yearn.finance vaults are primarily investment strategies in other DeFi projects such as Convex Finance and Compound Finance, with pre-programmed logic that decides when capital is transferred and code automation that decides the monetization and rebalancing process. Users also benefit from lower gas costs and lower transaction fees that Yearn.finance charges for each storage related transaction.
Earn, Yearn.finance’s premiere product, is based on interest rate changes in the Aave, dYdX and Compound protocols so users can always get the best interest rates. Essentially, Earn, a lending aggregator, allows Yearn.finance users to distribute their tokens via one or all of these liquidity protocols and earn higher interest rates than those offered by traditional financial instruments. For those who have invested in stablecoins like Binance USD (BUSD) and USD Coin (
USDC
), the Zap product allows them to switch between liquidity pools on the Curve Finance platform and deposit funds into any of Yearn.finance vaults using almost any token with a single click.
How does the Earn Credit Pool Work at Yearn.Finance
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