What is Yearn Finance? What does the YFI token do?

Yearn Finance is a DeFi product that circulates users’ money between different liquidity and lending protocols to get the best interest rates.
YFI token is the management token of the Yearn Finance platform.
The creator of the project is South African Blockchain software developer Andre Cronje.

What is yearn finance

2020 is going to be an unforgettable year for the DeFi field. New products and new protocols are emerging day by day. The increasing popularity of DeFi, brings with it some fraud incidents. Here, it is up to users to weed out fraudulent projects and those that are truly useful. The Yearn Finance protocol can be counted among the DeFi applications that provide real benefits to its users. As a result, Yearn Finance has emerged as one of the top 20 cryptocurrency projects by market capitalization today. What is Yearn Finance and why has it become so popular, what is YFI token, what exchanges are YFI coin listed on?

What is Yearn Finance?

It is essentially a DeFi, that is, decentralized finance application. Get into “What is DeFi?” In short, DeFi can be defined as an ecosystem of financial applications running on Blockchain. Yearn Finance makes it easy for users to get the best return on DeFi. The app circulates the deposited amount between different lending and liquidity protocols to get the best interest rates. Rapidly attracting users and investors, YFI is today the second-largest DeFi protocol by market capitalization and the fourth largest project in terms of locked value.

Yearn Finance was initially referred to as Andre Cronje’s hobby project but later expanded beyond that. The token, which was also listed on Coinbase, quickly entered the mainstream in the crypto money industry. The interesting thing about YFI is that Cronje called it “worthless”. Cronje said, “We repeat. YFI has zero financial value.”

What does the YFI token do?

YFI, as it is mentioned earlier, is the management token of the Yearn Finance protocol. In the protocol, decisions are taken by voting with this token. Token holders vote for changes to the protocol, thus providing a democratic environment. For example, the creator of the project, Andre Cronje, recently proposed to limit the supply to 30 thousand to prevent the current supply of 30 thousand tokens from increasing further. This proposal is up for vote and voting is ongoing at the time of this writing. If the community, that is, YFI token holders, vote in favor of limiting the supply to 30 thousand as the majority – which is the current trend, 96 percent – YFI supply will not be more than 30 thousand. YFI tokens are earned as rewards for liquidity provided to Yearn Finance pools.

The reason for the price boom

Initially, the high returns on the Yearn Finance pools led to the rapid popularity of the protocol. Currently, it is possible to earn returns with annual interest rates of up to 37 percent on DAI, USDC, USDT, LINK, CRV and TUSD pools. While this increases the demand for YFI, the limited supply of the YFI token is the biggest factor in its price exceeding $40K because there are only 30,000 YFIs! If the amount of YFI in circulation was 18 million 500 thousand as in Bitcoin, its price would be only 58 dollars.

Where to get Yearn Finance (YFI)?

Those who wish can earn YFI by providing liquidity to Yearn Finance pools, or they can buy it from exchanges. Currently, YFI is listed on numerous exchanges, with Binance leading the way. It is possible to get YFI quickly after registering on the Binance platform. Besides Binance, YFI is also listed on exchanges such as OKEx, Huobi, FTX, Gate.io.

SEE ALSO: What Is Fintech? What Benefits Do It Focus On?

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Caroline Tetra

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