The wider yEarn ecosystem

There is a whole lot more to the yEarn ecosystem than just yEarn.Finance. Having already looked at that in a previous article here we are going to details of the current range of services and tokens other than the yEarn platform and YFI token.

yTrade.Finance
This site provides leveraged stable coin trades and is still in the testnet stage. Liquidity Providers or LP’s earn additional interest on their yield bearing tokens, traders can create leveraged positions. It supports:
$DAI
$USDC
$USDT
$TUSD

LPs can deposit $yCRV, the output token when you provide liquidity to curve.fi/y
LPs retain all the rewards from $yCRV, trading fees, and interest from the underlying yearn.finance.
Over and above that, they receive interest from traders creating leveraged positions. This interest is calculated based on Aave utilization ratio. Returns as high as 30% when fully utilized. When traders open a position, it includes an initiation fee which is immediately rewarded to LPS.

So LPs earn;
Yield from yearn.finance
Fees from curve.fi/y
Initiation fees from traders opening positions
Borrow fees based on utilization for opened positions, up to 30%
Traders can trade $DAI, $USDC, $USDT, or $TUSD for one of the same. This trade is facilitated on curve.fi/y. Traders can choose any leverage they are comfortable with. Traders can close their position at any time.

yLiquidate.Finance
A liquidation engine which does flash loans from dYdX. When positions are liquidated 90% of the profit goes to the user and the remaining 10% is retained by the system. The main attraction of yLiquidate is that the user does not have to do anything other than to tell the system to liquidate the position. Also there is no capital requirement.

ySwap.Exchange
On the technological side, Cronje is very excited about ySwap. On the base layer, it is an AMM (automated market maker) that is “yield-aware”. It allows the swapping of debt tokens (tokens like DAI that are minted when you deposit collateral) between different pools.

Here are the three benefits of using ySwap:

Users get to have a stablecoin that is representative of the share of the entire ecosystem;
Liquidity providers only need single-sided exposure when depositing to AMMs; and
Users get to suffer less impermanent loss exposure.

yLeverage
yLeverage is basically DAI short position at up to 4x leverage. This is currently the project Cronje is focused on completing. He expects to release ySwap after yLeverage is completed.

yBorrow.Finance
Few details are known about yBorrow. Cronje has said he will be giving more details on this in due course. For now, we know it is a project in collaboration with Aave and concerns delegated credit and the ability to tokenise your credit/debit on the Aave platform and to do something with the same.

yInsure.Finance
Is a prototype for a new kind of tokenized insurance (testnet).
There are three core components to describe

• Insurer Vaults
• Insured Vaults
• Claim Governance

Insurer Vaults are LPs providing insurance. The first vault will be yiUSDC. LPs provide USDC and earn initiation and weekly fees paid by insurees. Should a claim be approved USDC is deducted from the vault and paid out to the claimant.

Insured Vaults hold the tokenized asset being insured. Taking USDT as an example, if you wish to insure USDT, you provide USDT to the vault, generating yiUSDT. On deposit you will be subject to a 0.1% initiation fee. Each week, you will be deducted a 0.01% fee. At any time you can withdraw USDT or deposit more USDT. Your insured sum is the amount of USDT deposited.

Claim Governance, allows the insured to create a claim by staking their yiUSDT. Insurer LPs vote with their yiUSDC. This follows the standard voting rules, 3 day voting period, 33% approval, 25% veto, all of which scale based on the claimed sum. Should a claim be approved the yiUSDT is distributed to the yiUSDC LPs and USDC is paid out to the insured.

The design of this system allows any asset that has a financial primitive to be insured, be it a base asset such as DAI, or a composite asset such as aDAI or yDAI.

LPs are rewarded with initiation fees and weekly fees, however, they are responsible for claim management, the base system does not have a minimum quorum and as such LPs should manage claims proactively.

Should LPs largely decline valid claims, insurees will simply move their funds out, making it unprofitable for LPs and thus aligning incentives.

The design further allows “passive” payments, similar to debit orders, where the insured does not have to make active monthly payments.

The first Insurer Vault will be USDC, and the first Insured Vault will be yUSD (wrapped yCRV) from yVault (yearn.finance/vaults)

The Tokens
With an entire ecosystem of tools to help you yield farm comes a range of different tokens. Here is an overview of the tokens used within the the yEarn ecosystem.

YFI
The Yearn Governance token
Only 30,000 minted and already fully distributed
The governance can mint more, if proposal to do so passes.

yTokens
When you deposit into any yearn service your deposit is wrapped and returned as a yToken representing the liquidity provided
For example, if you deposit DAI in y.curve.fi you will receive yDAI in return
Amounts of yToken and deposited token will differ since the yToken represents a share of a pool that is increasing in value
If you deposit a yToken into another yearn service you will get a yyToken back

yCRV
LP token for yearn’s Y pool at Curve.fi
Aka yDAI+yUSDC+yUSDT+yTUSD
Interest earning token representing your share of the Y pool composed of DAI, USDT, USDC, and TUSD
Via How to provide liquidity on Curve.fi Y pool?
Curve Finance Y pool has long been one of the most popular pools on Curve Finance due to its strong returns from trading fees supplemented by iEarn which also lends your stable coin in the background to the lending protocol with the best lending rates out of Compound, dYdX and AAVE.

yyCRV
LP token for yearn’s yCRV yVault
aka yyDAI+yUSDC+yUSDT+yTUSD
When you deposit yCRV into the yVault you receive yyCRV LP tokens
earns interest via yCRV, fees and yield farming rewards via the vault strategy

yEarn has managed to position itself at the very centre of the decentralised finance space. This is very much due to the incredible work of its creator Andre Cronje. The crypto world has high expectations of him and he has recently nominated himself to be a UNI token delegate. This very much places Andre at the very heart of the decentralized finance space and everybody is waiting to see what he does next.