Yearn.finance is a group of protocols running on the Ethereum blockchain that allows users to optimize their earnings on crypto assets.
Yearn Finance owes its existence to Andre Cronje, a South African coder who created and contributed to more than 25 DeFi projects.

Yearn Finance is a decentralized finance (DeFi) investor aggregator. It employs automation to allow investors to maximize yield farming profits.

Since its inception in February 2020 as iEarn, the service has seen tremendous growth as new products have debuted and developers have released the in-house token YFI. Yearn Finance’s goal is to simplify the ever-expanding DeFi space for investors who aren’t technically savvy or prefer to interact in a less serious manner than serious traders. Yearn Finance is a cryptocurrency that operates on the Ethereum and Fantom blockchains.

Yearn Finance is one of the few projects that was not funded by venture capital firms. Furthermore, Cronje did not raise any funds, private or public, through YFI token sales. Cronje chose not to reserve any YFI tokens for himself in order to adhere to the spirit of decentralized finance.

History of Yearn Finance

Yearn.finance began as a service called iEarn. Andre Cronje launched Yearn.finance in February 2020. Cronje left the project but returned to supervise an overhaul. By July 2020, new tools, a new name (Yearn.finance), and a native token (YFI) were available. Yearn.finance was first available on Ethereum, but it is now also available on Fantom.

How does Yearn Finance work?

Yearn Finance offers a variety of DeFi products, including lending aggregation, yield generation, and insurance. It began solely as a lending aggregator. Crypto assets are automatically switched between lending platforms in search of the best yield in a lending aggregator. Yearn then launched an automated yield generator, allowing investors who don’t have the knowledge or time to understand DeFi to participate.

How can you use Yearn Finance?

Yearn Finance offers a number of products that can assist you in optimizing specific DeFi activities.

Earn – Deposit stablecoins like USDC or DAI, and Yearn will look for the best DeFi platforms with the highest yield. Earn automatically rebalances to maximize your yield.

APY – Search the lending protocols available on Earn and estimate how much interest they should expect to earn annually for a specific amount of money.

Vaults – Deposit assets like USDC and DAI into various Vault strategies. Each vault strategy invests assets differently and has a different return on investment history.

Zap – Finish multi-step transactions with a single click, saving time and gas money. Exchange USDC for yCRV in one action, versus three on yearn.finance and Curve.

How can you use YFI?

YFI is an ERC-20 token that is used to govern Yearn Finance. YFI holders must stake their YFI in order to participate in governance. The staked YFI is locked for three days when a user votes. At regular intervals, users who vote earn a percentage of protocol profits for each of Yearn’s products. According to Andre Cronje, this is a “dividend, not a yield strategy.”

Closing Thoughts

Yearn.finance has been audited by multiple reputable firms to ensure the security of user funds, but there is always a risk of vulnerabilities in the DeFi space.

As an investment, YFI is subject to market fluctuations and depends on the success and adoption of the Yearn.finance platform and DeFi ecosystem. YFI may emerge as a leading investment option if the platform continues to innovate and gain community support, while also benefiting from broader market trends. It is important to conduct thorough research and carefully consider risks before investing in YFI or any other DeFi asset.