![]() Especially considering that holding YFI gives you voting rights on the Yeran.Finance project and it earns a small dividend from the fees collected from the vaults. With that in mind, an 80% increase in price is possible. In a perfect world, the market cap should actually be higher than the TVL. Remember, YFI has a TVL of nearly $4.5 billion and a market cap of only $2.5 billion. However, the price is still slightly undervalued. The ~$67,000 price of YFI is actually a decrease from the all-time high of nearly $90,000. This section will cover some of the financial details of the token and whether or not it’s a good investment. Well, the price of YFI went from about $6 to ~$65,000 in under a year, so the token has already seen massive growth. However, you will have to pay gas fees, so it might not be worth it unless you hold a large amount of YFI. Those ‘dividends’ can be earned by staking the YFI token. Now, YFI holders voted to distribute a percentage of fees to YFI holders. But that did not work out as planned as users quickly began trading the token and the value went from $6 per token to about $30,000 within a few months. It’s important to note that YFI tokens were not supposed to have any value – they were strictly a governance token. It was an especially fair launch of a governance token because staking more LP tokens did not result in more YFI tokens, which is bucking the trend compared to how most governance token offerings operate. This fair launch was achieved by staking the LP tokens from the 圜RV pool. There was no pre-mine, no team share, and no venture capital share. And, in our opinion, it is the most fair governance token on all of DeFi. YFI is the governance token on Yearn.Finance. The general concept of yield robots that implement the best yield strategies on DeFi is simple enough to understand, but you should do your own research into the different strategies that different vaults use before investing into a vault. Keep in mind, this is an extremely basic overview of yVaults. It also makes it much simpler and safer for the investment strategy. This was put in place because users want to withdraw the funds they deposited. That means you can’t swap yDAI for yUSDC. It’s important to note that a basic underlying principle of Yearn is that users can only swap tokens of the same type. Fees are 0.5% for withdrawing and then a 5% fee (gas fees + 10% for developer and the remaining % goes to the YFI treasury vault) for profit earning strategies. You will receive back the DAI you deposited plus earned DAI minus fees. ![]() Anyway, when you would like to withdraw your deposit, you simply go to the vault and swap the yDAI back to DAI. ![]() These strategies are often extremely complex and go far beyond the scope of this article, but they do earn yield. ![]() Now, that deposited cryptocurrency uses a strategy to earn yield. ![]() In exchange for the deposit, you receive back yTokens of that token (ie. Simple, you first go to the vaults page on Yearn.finance, search for a vault, and deposit the coins into the vault. The best part is it’s all automated, too. This strategy can include yield farming, lending out tokens, borrowing tokens, and pretty much anything else on DeFi. For one, yVaults have a strategy that is voted on by the community and then put into action to see how it works out in reality. They are basic at their core, but the strategies employed by them are complex. YVaults are what put Yearn.Finance on the map. It’s a fairly basic concept, but it has proven extremely successful with over $4.5 billion in total value locked in the vaults. Basically, it’s an investment platform that automatically allocates invested funds in yVaults between the highest yielding products on DeFi. Yearn.Finance, in our opinion, is one of the most interesting protocols on DeFi. This article will explain everything you need to know about Yearn.Finance, its token YFI, and whether or not YFI is a worthwhile investment. Yearn.Finance is one of the most popular “lending” platforms on DeFi and has seen explosive growth in recent weeks. ![]()
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