Yearn.Finance Review 2022

Yearn.Finance is considered one of the most demanded lending protocols in the crypto market. Working on integrating decentralized finances into the daily lives of users, Yearn.Finance provides different services for people who want to participate in DeFi (decentralized finances).

There are a huge number of DeFi protocols in the crypto market, but Yearn.Finance offers one of the highest incomes in this sector and provides users with many various functions. In the cryptocurrency finance ecosystem, it is rare to find a protocol as diverse as the Yearn decentralized finance protocol.

Let’s see why this protocol is so in demand among users of DeFi and what it is.

What Is Yearn.Finance?

Yearn.Finance is a DeFi protocol that gives users an opportunity to get some of the highest annual interest yields in contrast to different DeFi protocols. Owing to protocol, the users can deposit money directly into the liquidity pools and receive income. The vault service (software wallets) comes with an annual maintenance fee of 2%.

Yearn.Finance also provides its users with impeccable security standards and management of protocol is implemented by YFI holders. This means that the financial community using the protocol has the ability to monitor it and vote on the platform for the protocol direction that is more suitable for their purpose.

Who is the founder of Yearn.Finance?

The founder of Yearn.Finance is Andre Cronje. This protocol was created in 2020 in order to provide users with the opportunity to increase profits from deposits of Ethereum, Stablecoins, and Altcoins.

Andre Cronje is an IT developer from South Africa who decided to launch the Yearn.Finance platform after noticing a disparity in returns across various DeFi applications.

Shortly after Cronje’s protocol was launched, it was hacked. Then, it was modified and improved by developers to enable investors to use new products. Nowadays, the protocol is considered one of the safest in the DeFi market.

How does Yearn.Finance work?

Yearn.Finance protocol operates on the Ethereum blockchain and is created to use decentralized financial services (DeFi) such as lending, obtaining percentages of investments, and trading. Yearn.Finance works by autonomously moving investor funds to the most profitable projects. That is, it finds the protocol that provides users with the best annual percentage return (APR).

This platform is a very profitable solution in the DeFi sector, as it allows its users to earn high income by locking ERC-20 stablecoins (USDC, USDT, TUSD, DAI, or SUSD) in the protocol. In return for them, investors receive the same amount of yToken. Thus, the YFI token does not differ from any other ERC-20 coins from a technical standpoint.

The Yearn.Finance platform automatically switches locked digital coins to the protocol with the highest yield in order to increase the investor’s profit.

Another significant benefit of using Yearn.Finance is that the network collects a small commission to contribute to the platform pool, which is then distributed to users of YFI tokens as dividends.

What is YFI token?

YFI is the token of the Yearn.Finance platform. ​Unlike BTC, YFI is a governance token that has an autonomous protocol. At the moment, YFI is one of the largest Ethereum-based tokens that prioritizes automated yield farming strategies.

Where can a user buy a YFI token?

There exist different ways to buy a YFI token. Let’s consider them:

• Purchasing a YFI token on the crypto exchanges (Binance, Huobi Global, OKEx, FTX, and LocalTrade).
• Contributing yCRV to the yGov pool.
• Obtaining a YFI token by staking tokens in the balancer protocol in exchange for BAL or BPT coins, and then depositing them with help of yGov in return for YFI.
• Buying a YFI token via Cryptorobotics terminal (more detailed information on how to do this, you can find here).

Products of Yearn.Finance

Yearn.Finance is one of the most rapidly developing DeFi projects that only uses code in providing its services, entirely obviating the need for third parties such as a bank.

To do this, an automated reward system was developed on the platform, which is based on the own token of the YFI platform.

There are several products that are provided by Yearn.Finance:

APY is a data sheet that provides users with information on rates of interest for various lending protocols.

Earn informs users about the highest rates of interest that they can get due to borrowing a cryptocurrency. To do this, it engages with protocols such as Aave, Compound, Dydx and enables users to get passive income from stablecoins (USDC, sUSD, DAI, USDT, TUSD) and wBTC.

Vaults are a range of investment strategies that are intended to increase returns from other DeFi projects.

Zap allows users to invest several times with the help of a single click of a computer mouse, saves time, and reduces additional expenses as well as transaction fees.

These Yearn.Finance products were created with the aim of allowing users to borrow a digital asset or use their funds in trading. Therefore, the project has made the process of investing in DeFi and farming more affordable to users.

Pros and cons of using Yearn.Finance protocol:

Pros:

• Provides a high rate of returns.
• Ensures a high level of security.
• One of the most promising financial protocols and tokens today.
• A wide range of decentralized financial services.
• Rapid liquidity growth.

Cons:

• The difficulty of mastering for beginners.
• No specific roadmap.

Perspectives of Yearn.Finance in 2022

Whatever the future of Yearn.Finance, this project definitely makes a significant contribution to the development of DeFi technology in general. At the moment, participants are finding significant benefits in working with the protocol at fairly low risks. The source code of the protocol is open and available to anyone, which guarantees the transparency of all actions of developers.