Yearn — The World’s First DeFi Conglomerate Continues To Astonish
On Sept. 20, I published “Yearn Is The Future Of DeFi, And DeFi Is The Future Of Finance,” in which I wrote:
Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it. — Ferris Bueller
The world has never seen an industry move at the speed that DeFi is moving. Innovation in DeFi is able to move at warp speed because DeFi is composable, meaning you can take the innovation of others, and like legos, snap it together with other code, and you’ve got something completely new. Ferris’ quote above has been shortened, and updated for tech/crypto to
“I test in prod” Andre Cronje, Founder of Yearn
In the 3+ year I’ve been crypto 24/7, Yearn is the most interesting and expansive project I’ve seen
If you’re not familiar with Yearn, that piece is a great primer. This is Part II of my deep dive in to Yearn.
Part II covers the 70 days since that post, during which Yearn has continued to innovate, educate, and execute at an astonishing pace. Below are just some of the Yearn highlights of the last 70 days:
1. Total Value Locked Has Decreased By 53%
TVL is the metric that the market is most focused on, so Yearn’s 50% TVL plunge is a concern. But the reasons for the TVL drop are understood, and the DeFi ecosystem that Yearn is building is only increasing in scope and scale.
The decrease has been driven by multiple factors including the attack of Eminence on Sept. 29. As a project lead by Andre Cronje, Yearn’s founder, the exploit of Eminence, as well as multiple other DeFi projects, has had an impact on all of DeFi, but even more so on Yearn.
Another factor is the launch of Ethereum 2.0, which has hoovered up more than 850,000 ETH, which have been staked as part of the launch. That ETH came from somewhere, including Yearn and other DeFi projects, which have seen a decrease of 2 million ETH locked in the past two weeks.
2. Price Has Remained Highly Volatile, But at $25,000+ Today, It’s Trading At 3X+ It’s Nov. 5 Low
The world largely has no idea what Yearn is, and even less of an idea of what it is going to be. So it’s no surprise that the world has no idea how to price Yearn.
3. Cronje Announces Keep3r Network, A Coordination Network For Projects To Ensure Proper Maintenance
Currently, every DeFi project is responsible for finding talent (or “Keepers”) to maintain the various elements of their protocol (e.g. calling update() on an Oracle to update its underlying value, calling harvest() on strategies to rotate funds).
Announced by Cronje on Oct. 22, keep3r provides a single source for projects to access approved Keepers. Keep3r is a standalone project not directly affiliated with Yearn, but will help Yearn and the entire DeFi ecosystem.
Keep3r reviews and approves each bonded Keeper before they can begin executing on a contract.
Projects needing Keepers to perform specific actions simply submit a contract to the Keep3r Network, which approved Keepers can execute. Keepers can be rewarded directly via ETH and/or project tokens, or indirectly, via liquidity.
The Keep3r Network also enables the creation of a whole range of dapps not previously possible. Three new dapps will be available as part of the Keep3r Network launch, including MetaWallet, a smart contract that enables the transfer of ETH and other without needing to actually submit a transaction or spend gas yourself.
4. Yearn Announces ‘Merger’ With Pickle
On Nov. 24, Cronje announced that “Pickle and Yearn developers have worked out a structure to allow the two projects to work together in symbiosis.”
Just a few days earlier, Pickle was attacked, and $20M Dai was taken from its Jars (aka vaults).
The merger brings Pickle into Yearn’s ecosystem, including security expertise, while Pickle contributes its developer talent and TVL (by merging their vaults). In DeFi’s first bailout, a new token, CORNICHON, will be distributed proportionally to victims of the Pickle attack . Pickle and Yearn will remain separate brands.
5. Yearn Announces ‘Merger’ With Cream
The synergies including facilitating a protocol-to-protocol reserve service that enables protocols like Aave or Compound to access additional capital efficiently.
Cream will also become the launchpad for Stable Credit, Yearn’s highly ambitious project to create a single protocol for decentralized lending, AMM, and stablecoins.
6. Yearn Announces ‘Merger’ With Cover
On Nov. 28, just 10 days after Cover was launched, Cronje announced the merger with Cover, a protocol enabling users to mint, redeem, and purchase insurance to protect against smart contract risk. The longer term vision for Cover is to allow anyone to buy insurance on anything.
The merger with Cover allows YFI to become its own cover ecosystem, and allows YFI vaults to have cover taken from yield to hedge risk, without any upfront user costs.
7. Yearn Announces ‘Merger’ With Akropolis
Yearn will get access to investment strategies created by Akropolis, as well as their business development expertise, and exposure to Akropolis’ institutional clients.
Akropolis will similarly get access to Yearn’s network, offering bespoke access to Yearn’s institutional clients, with investment strategies tailored specifically for them.
7. Yearn Announces ‘Merger’ With SushiSwap
On Dec. 1, Andre announced the merger with Sushiswap, the high profile fork of AMM Uniswap that rose to fame on the back of an “innovative” (or vampire like) incentive structure to siphon off users from Uniswap that resulted in over $1B in TVL for Sushiswap on the first migration day:
Andre described the merger as “..one of the more aggressive synergies, and as such a few core items are to be voted on via governance,” as opposed to past merger decisions which Andre made himself. Andre highlighted that the need for Yearn to develop custom AMM experiences that Sushi is poised to provide given it’s noted innovations in yield and money markets.
9. Andre Discusses Nomenclature Re: The ‘Mergers’
Cronje published a post on Nov. 30 to clarify his thoughts on the recent YFI “merger” activity. He recognizes the activities can’t clearly be described by any existing finance industry nomenclature (e.g. merger, acquisition, partnership or collaboration). He finished the post with:
DeFi allows us to be both collaborative, and symbiotic, while still being individual. I don’t know what we should call this, but I am definitely very excited about it.
I’m similarly “very excited“ about DeFi, and Yearn in particular. With just $450 million locked, Yearn has just 0.02% of assets as the world’s 10th-largest financial services company:
But the transformation of traditional finance is just beginning, and the traditional finance world has no idea what’s coming.
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This content is for educational purposes only. It does not constitute trading advice. Past performance does not indicate future results. Do not invest more than you can afford to lose. The author of this article may hold assets mentioned in the piece.
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