Launched in July 2020, Yearn.finance has become a major player in the emerging decentralized finance (DeFi) space, offering services such as staking, pool lending and monetization on the Ethereum blockchain. The project offers the most user-friendly independently delivered cryptocurrency trading service, using Yearn Finance (YFI) native ERC-20 cryptocurrency to incentivize those who lock their cryptocurrency in Yearn.finance contracts through some of the supported platforms such as Balancer, Curve DeFi.
Because all protocols run on the Ethereum blockchain, Yearn.finance is run by developers who act on governance proposals voted on by YFI owners. The Yearn.finance platform is designed to simplify the process of investing in DeFi products, and also gives users the opportunity to invest in other DeFi protocols, as well as receive a percentage of platform fees commensurate with their YFI holdings.
Who is behind Yearn.finance?
Crypto and DeFi veteran Andre Cronje launched the Yearn.finance protocol without raising funding through either public or private funds. Instead, the software engineer used his over twenty years of experience in software development to first launch the protocol and then issue YFI tokens to retail investors, which are currently limited to 36,666 tokens.
Apart from the extremely rare approach taken by Cronje, Yearn.finance has benefited from its previous experience as a founder of the Keep3r network and its association with well-known DeFi projects such as PowerPool, Hegic, Cover, Pickle, Cream V2, SushiSwap. and the Acropolis among others. Unlike other founders, Cronje did not keep YFI tokens for himself before the launch of the Yearn.finance protocol, believing that a platform based on decentralized blockchain technology should not belong to the founder and dictate its future course.
In fact, the history of Yearn.finance goes back to the efforts of the last five years to launch profitable financial products for the unbanked segment of the world’s population, and it has been strongly influenced by the efforts in Africa to achieve this goal. . . By choosing to focus on creating value for the integrated ecosystem of DeFi developers, partners and investors on the Yearn.finance platform, Cronje has given dozens of crypto-entrepreneurs a new look at 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 such as a bank and gives crypto investors and token holders access to a variety 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 runs on. Delivered through a streamlined web interface, Yearn.finance is a radical DeFi experience with the sole purpose of maximizing the return of crypto assets for its users.
The most sophisticated of the products are Vaults, which act like a mutual fund and have over 50 different lockers or storage pools for Yearn.finance users to deposit tokens. DeFi projects such as Convex Finance and Compound Finance with pre-programmed logic that determines when capital will be transferred and code automation that determines the monetization and rebalancing process. Users also benefit from lower gas costs and lower transaction fees that Yearn.finance charges for each store-related transaction.
Earn, the flagship of Yearn.finance, relies on interest rate changes on the Aave, dYdX and Compound protocols to ensure that users can always benefit from the best interest rates. In principle, the aggregate allows Yearn.finance users to distribute their crypto-tokens across any or all of these liquidity protocols and receive higher interest rates than those offered by traditional financial instruments. For those who have invested in stablecoins such as Binance USD (BUSD) and USD Coin (
), Zap’s product allows them to switch between liquidity pools on the Curve Finance platform and deposit funds into any of the Yearn.finance vaults using virtually any token with a single click.
How lending works in the earnings pool in Yearn.Finance
This not only saves money and time, but also makes the whole task easier, since many individual transactions are linked to the cryptocurrency Yearn.finance. The platform also offers its annual interest income or APY tool, which combines the interest rates offered by various DeFi lending protocols at a glance, helping the cryptocurrency.