A 5-Minute Complete Guide to Yearn Finance

Yearn finance was founded by Andre Cronje.

It was previously known as iEarn.

In the early days, Cronje had understood that the yield farming had become more complicated.

He also anticipated that it would continue its complexity over time.

In order to stack up more earnings, people wanted to combine multiple lending platforms.

They found it difficult to make profits due to its accessibility.

In regard to this, Cronje decided to develop a product to make the process simpler.

Thus, This led to the development of Yearn finance. 

What is Yearn Finance? 

Yearn finance is considered as one of the finest and largest sources of passive income by most of the investors.

It is referred to as the most promising decentralized project in the cryptocurrency platform.

It has drawn attention due to its potential high returns.

It currently has over more than $113 million worth of assets being locked up in its platform.

It is a platform that provides yield farming opportunities.

With getting along with other platforms, it helps the users in optimizing their yield farming results.

As a user deposits tokens to the platforms, they are converted to yTokens. The main aggregator of yTokens is Curve and other aggregators are USDC, USDT, TUSD, DAI.

Products of Yearn

• Ytrade. finance, This allows leverage trade up to 1000x with the initiation fee and 250x without the fee. Supported currencies tokens include $DAI, $USDC, $USDT, $TUSD, and $sUSD
• Yearn. finance, This allows profit-switching between different Defi platforms like Aave, Compound, Curve, etc. autonomously.
• Yliquidate. finance, This offers an automated liquidation mechanism for Aave. On a priority basis, YLiquidate allows 0 capital liquidations.
• Yswap. exchange, The Yswap exchange offers a stable AMM, which allows single-sided liquidity provision.
• Yleverage. finance, This enables the creation of a 5x leveraged Dai vaults with USDC. 

Working of the Yearn Finance

This is considered to be simpler than other Defi projects.

It works by moving the stable coin funds between different projects such as Aave, Compound, and DyDx.

It depends on the stable coin which is generating the most APY.

The currencies which yearn finance supports currently are DAI, USDC, USDT, TUSD, and sUSD.

These supported currencies are likely to change over time as the protocol is governed by the community.

These stable tokens are converted over time automatically to a similar amount of tokens.

These are commonly known as “yield optimized tokens”.

This can be further used to earn the YFI Tokens. 

The token and where to buy it?

YFI token is the native token for yEarn.

It was previously known as iEarn.

The users or the token holders enjoy the access to voting or participating in the governance decisions of the network.

These include decisions such as the supply and the distribution of potential tokens to the users.

The token is of no intrinsic value.

The users who provide the liquidity to any of the platforms can get access to the YFI Tokens.

It offers distinct features since it has no pre-sale, pre-mine, or even allocation to the founder.

It is also considered to be one of the most decentralized tokens which have ever been issued.

Here’s how we can buy it – 

3 ways of earning the YFI tokens which can be explained briefly as below 

• First method says it includes the deposit of a mixture of about 98% – 2% mix of DAI and YFI  into the Balancer protocol. This can be further exchanged for the BAL (Balancer protocol) tokens in return. These BAL tokens are then deposited into YGov in exchange for YFI. 
• Second method, including stable coins deposit into Y finance. 
• The third method includes depositing a mix of YFI and yCRV into the Balancer exchange. This is exchanged for the BPT (Balancer pool) tokens. These are then further deposited into YGov to acquire the YFI tokens.

The decentralized exchanges are considered to be the best place to get the YFI tokens. 

Governance

One of the main exciting features of its governance is that the holders could burn their YFI Tokens in exchange for the same amount of funds that are locked in the pool.

Its governance system is often referred to as “meta governance”.

It involves a higher risk since the assets are being taken into account by the other Defi protocols that interact with Yearn finance.

The users that have deposited their BPT tokens into the YGov governance pool are the ones who are eligible to cast their votes in the Yearn finance platform.

Conclusion

Yearn finance offers an innovative platform and promotes Defi to an advanced level.

It aims to work efficiently with the other existing protocols of Defi.

Thus it is considered to be one of the most advanced decentralized projects made to date.

Yearn finance primarily aims to ensure that the tokens are being used to the maximum extent by the yield farmers.

It works promoting the users to access multiple platforms at the same time without limiting to any one platform.

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