What is Yearn Finance? What does YFI token do?

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Summary

Yearn Finance is a DeFi product that circulates users’ money between different lending and liquidity protocols to get the best interest rates.

YFI token is the management token of the Yearn Finance platform.
The creator of the project is South African blockchain software developer Andre Cronje.

2020 is an unforgettable year for the DeFi space. New products and new protocols are emerging day by day. Of course, the increasing popularity of DeFi brings with it some fraud incidents. Here, it is up to users to sort out the really useful ones with fraudulent projects. The Yearn Finance protocol can be counted among DeFi applications that provide real benefits to its users. As a result, Yearn Finance has become one of the top 20 cryptocurrency projects by market capitalization today. What is Yearn Finance and why has it become so popular, what is the YFI token, which exchanges is the YFI coin listed on? We answer all these questions starting with what Yearn Finance is.

What is Yearn Finance?

Yearn Finance is essentially a DeFi, decentralized finance application. “What is DeFi?” Those who are curious about DeFi, which will start with the question, can benefit from our article titled What is DeFi? In short, DeFi can be defined as the financial applications ecosystem running on Blockchain. Yearn Finance makes it easy for users to get the best return on DeFi. The application circulates the invested amount between different lending and liquidity protocols to get the best interest rates. YFI, which quickly attracts users and investors, is today the second largest DeFi protocol in terms of market value and the fourth largest project in terms of locked-in value.

Yearn Finance was initially referred to as Andre Cronje’s hobby project, but later it went beyond that. The token, which also started to be listed on Coinbase, quickly entered the mainstream in the cryptocurrency industry. The interesting thing about YFI was that Cronje described it as “worthless”. Cronje said, “We are repeating. The financial value of YFI is zero. ” he was saying.

What does YFI token do?

YFI, as we mentioned before, is the management token of the Yearn Finance protocol. Decisions in the protocol are made by voting with this token. Token holders vote for changes to the protocol, thereby creating a democratic environment. For example, recently, Andre Cronje, the creator of the project, proposed to limit the supply to 30,000 to prevent further increase in the current token supply of 30,000 units. This proposal has been voted on, and voting is in progress at the time of this writing. If the community, that is, the YFI token holders, vote in favor of limiting the supply to 30 thousand as the majority – the current state of affairs is 96 percent in this direction – the YFI supply will not be more than 30 thousand. YFI tokens are earned as a reward for the liquidity provided to Yearn Finance pools.

The reason for the price boom

The initially high returns in Yearn Finance pools allowed the protocol to quickly become popular. Currently, it is possible to earn returns with annual interest rates of up to 37 percent in DAI, USDC, USDT, LINK, CRV and TUSD pools. While this situation increases the demand for YFI, the limited supply of YFI token is the biggest factor in its price exceeding 40 thousand dollars, because there are only 30 thousand YFIs! If the amount of YFI in circulation were 18 million 500 thousand as in Bitcoin, the price would be only 58 dollars.

Where to buy Yearn Finance (YFI)?

Those who wish can earn YFI by providing liquidity to Yearn Finance pools, or they can purchase it from exchanges. Currently, YFI is listed on a large number of exchanges, with Binance being the top one. After registering on the Binance platform, it is possible to get YFI quickly. YFI is listed on stock exchanges such as OKEx, Huobi, FTX, Gate.io as well as Binance. It will soon start trading on Coinbase Pro. YFI is not yet available on a Turkish stock exchange.


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