DeFi platform Yearn Finance (YFI) has gone from scratch to become a hero in a very short time, taking the cryptocurrency industry into a terrific storm. According to the latest research, the token provides huge gains for its holders.
Two months ago, Yearn was a relatively unknown decentralized credit aggregator among the many projects that emerged in the DeFi industry. This protocol, which has a total value (TVL) locked to the protocol less than $ 10 million, has reached TVL levels of $ 763 million today, booming over 7,500%. Moreover, the local government token YFI saw gains that exceeded the price of Bitcoin.
Returns for YFI Owners
Recent research by Messari for the cryptocurrency has revealed the rise in popularity of the platform and potential returns that could return to token holders and liquidity farmers.
Researcher Ryan Watkins explained that with the launch of Yearn Finance v2, the appeal seems to be the automation of yield farming. To reduce the time spent on research and gas costs, the protocol enabled yield farmers to invest their funds in a “yVault” and automatically allocate crypto guarantees to the best available strategies and pools. Watkins added that the YFI consists of a double earning mechanism, lending optimization, vaults or yield farm optimization.
Looking at the price-selling tiers, the researcher noted that YFI is one of the lowest in the DeFi industry at 20x. The price-to-sell ratio is a valuation rate that compares the price of a company’s stock, or in this case the price of crypto assets, to its income. Using these numbers, Watkins used the following expressions:
“YFI currently generates just over $ 21 million in cash annually.”
A chart showing the inverse of the price / earnings ratio, also known as the P / E ratio, shows that all YFI holders’ tokens will offer a 5% annual return. Approximately 12% of YFI is currently shared in the pool, while stakes generate approximately 40% annual returns using a P / E ratio of 2.4.