Decentralised finance (DeFi) has taken the crypto world by storm. There are now regular finance projects at your fingertips. New trends like yield farming and liquidity pools are drawing users into the DeFi space. One of the standout projects in this explosion has been Yearn Finance (YFI), which automates earnings from stablecoins by eliminating the need for traditional banks. So, what is Yearn Finance (YFI)? In this guide of Zatrun.com, you can find out what you need to know.
What is Yearn Finance and How Does It Work?
Yearn Finance (YFI) is a blockchain project that brings values such as credit collection and blockchain yield production. This project allows users to take advantage of the best strategies to earn cryptocurrencies through lending and other trading methods. It also serves as a gateway to various protocols and is currently one of the largest DeFi projects.
This group of protocols operates on the Ethereum blockchain and eliminates the need for financial intermediaries such as banks or custodians. While doing so, it also doesn’t neglect to maximize users’ earnings. Thanks to its decentralized architecture, YFI coin also gives investors additional confidence and enables them to achieve returns of up to 15% annually.
Yearn Finance is a protocol that moves crypto assets from one decentralized lending protocol to another, allowing users to maximize their returns. The DeFi platform is designed to increase users’ annual earnings. The platform transfers users’ assets between DeFi products like Aave, Dydx, and Compound to increase APY. To provide users with optimal services, YFI runs its contracts on the Ethereum blockchain. This way, YFI coin tracks funds on decentralized exchanges, allowing users to stay in the most profitable liquidity pools.
What is YFI Coin? Is It a Good Investment?
YFI coin is the native cryptocurrency of the Yearn Finance ecosystem and controls all system transactions. The owners of the cryptocurrency have the advantage of voting on several off-chain proposals and managing the ecosystem. To implement a change, a specific proposal must receive more than 50% of the total votes. Everyone has the advantage of making proposals, but only YFI holders have the right to vote. In the meantime, YFI coin holders also benefit from a set of incentives that the ecosystem automatically allocates.
The price of YFI coin has fallen significantly from its all-time high of around $93,000. This was due to investors turning to safe havens like gold due to problems in the global economy. However, there are analysts who say that it will shine again due to the high returns offered by DeFi when the economic situation improves. If this happens, it is likely that Yearn Finance will once again draw attention.