yearn finance is a set of Ethereum blockchain-based protocols that allow users to enhance their earnings from cryptocurrency assets by lending and trading.
yearn finance is one of a number of new decentralized finance (DeFi) startups. yearn finance uses only code to provide its services, eliminating the need for a financial intermediary like a bank or custodian. To accomplish this, it has established an automated incentives system around its YFI cryptocurrency.
yearn finance products
The yearn.finance platform comprises a number of distinct services, including:
APY: A data table that compares interest rates across various loan formats.
Earn: The maximum interest rates associated with a specialized asset are displayed here.
Vaults: It’s a compilation of investment techniques for getting the greatest returns out of other DeFi projects.
Zap: When you combine many trades into one click, you may save money on expenses and labor.
Users earn YFI tokens by locking their crypto tokens in the yearn.finance contracts on the Balancer and Curve DeFi trading platforms, both of which are powered by the yearn.finance platform.
Yearn.finance takes advantage of a practice known as “yield farming,” in which users store cryptocurrency in a DeFi system to earn more crypto. The protocols give out additional tokens as the number of assets stored on a platform rises.
The yearn.finance platform, which launched in May, has already attracted approximately $800 million in assets in its first month of operation, making it one of the fastest-growing DeFi projects to date.
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How does yearn.finance work?
yearn.finance is a framework that allows contracts to be deployed to the Ethereum blockchain and other decentralized exchanges like Balancer and Curve.
Users are putting their faith in YFI’s contracts and those of associated Balancer and Curve to be deployed on Ethereum to deliver the promised services since they believe that these contracts will be implemented.
Lending and trading at yearn.finance
The majority of yearn.finance’s services, including Earn, Zap, and APY, aim to let customers borrow or trade their cryptocurrency.
Earn is a service that finds the best interest rates on lending by cross-referencing different lending protocols, such as Aave and Compound. Users may deposit their DAI, USDC, USDT, TUSD or sUSD on the yearn.finance platform to earn those interest rates.
For example, one-click on Zap allows users to make several investments at the same time. When compared to nine actions across the year on finance and Curve platforms, trading DAI for yCRV (another DeFi cryptocurrency) is quicker. This saves the user time, fees, and transaction expenses.
What is yearn.finance vaults?
Vaults yearn.finance’s most complex service, allowing users to follow active investment techniques by using the platform’s self-executing code. Vaults are similar to actively managed mutual funds in this manner.
This is still a work in progress, therefore the strategies are implemented in Solidity, which necessitates some coding knowledge on the part of users.
However, investing in a Vault is simple. yearn.finance’s user interface allows users to invest in popular cryptocurrencies such as DAI and USDC in each strategy, with historical ROI displayed for each.