Buy YFI (Yearn Finance)
To launch a successful blockchain project with a native coin that will make it into the top 100 in terms of capitalisation, you don't have to build a team of programmers, conduct an ICO or attract venture capitalists.
A case in point is DeFi aggregator Yearn Finance, single-handedly created by Andre Cronje. His platform has changed the world of decentralised financial instruments by offering investors a convenient and profitable earning environment. A detailed review of Yearn Finance cryptocurrency will show why it is interesting to invest in YFI and why Andre Cronje has been called the "father of DeFi".
Where to buy YFI
You can buy YFI in Somalia on dozens of exchanges. Centralised ones are more secure, and their functionality is more straightforward, but DEX allows greater anonymity. Also, if a user does not want to provide personal data, create an account, and use intermediary sites. It is essential to consider their reputation, commissions, exchange rates, and liquidity.
As of December 2021, according to the YFI cryptocurrency review, it is traded on 65 platforms. Among them are the top centralised exchanges (CEX):
3. Huobi Global
History of Yearn Finance (YFI)
Those looking to buy Yearn Finance would do well to learn about the platform's history.
Programmer André Cronje, who lives in South Africa, became interested in cryptocurrencies and blockchain back in 2015. But for the first three years, he was only a spectator. Then, in 2018, he started writing reviews of initial coin offerings (ICOs) for CryptoBriefing and advising blockchain start-ups and funds such as Fantom, Fusion and Wanchain.
At the same time, he has invested and found new ways to maximise passive returns from stablecoins.
Until 2020. André Cronje manually checked bets (APR) on the popular Compound, Aave, dYdX protocols and redistributed his finances. Then, to avoid paying gas commissions, he wrote smart contracts that would automatically perform the calculations. This was the first step towards launching a full-fledged platform.
In February 2020, Yearn Finance (formerly iEarn) was launched.
From the summer of 2020, the platform began to gain popularity. By September 2020, blocked assets (TVL) value was $1+ billion. As of December 2021, the service ranked 8th among DeFi with $4.15 billion.
Features of cryptocurrency
So why buy YFI? The project aims to make investing in decentralised financial instruments and pharming more accessible. It acts as an aggregator for the popular DeFi lending protocols. For the user to get the maximum profit, it automatically shifts the holdings between Aave, Curve, Compound, focusing on the annual percentage yield.
The primary target audience is investors who are not interested in exploring the DeFi sector in-depth but still want to make high passive profits from farming. The platform will automatically select the best terms.
Farming, profitable farming is a designation for the same process, where the user earns from the coins they already have. Liquidity providers/providers contribute assets to specific smart contracts (pools). In exchange, they receive rewards in cryptocurrency.
Basic investment tools
If you want to invest in YFI in Somalia, you will be happy to know the essential tools.
So, the tools available to investors are:
- yVaults. These are analogous to a savings account for cryptocurrencies, which generate passive income for users. Deposits are made into them and then channelled through strategies to DeFi-protocols to generate the highest possible returns with minimal risk. Not only stablecoins can be deposited, but also other coins. The advantage of yVaults is lower fees on the Ethereum network. When capital pooling takes place, only one account pays the fee in gas to start farming. An updated v2 version has also been released.
- Earn. This is another aggregator for lending, which is similar to a more simplified version of yVaults. It is supported in version V1. It allows you to earn passive income from stablecoins (USDT, USDC, DAI, sUSD, TUSD) and wBTC. It interacts with protocols such as Compound, dYdX, Aave, automatically moving coins to the one with the best interest rate.
- Zap. You can quickly deposit into yVaults via Zapper. Tokens traded on Uniswap with a slippage rate of up to 1% will do. yVaults will accept the coin, convert it to what you need for the vault and add it to 1 transaction. On withdrawal, the Holder can receive ETH, Wrapped ETH, Wrapped Bitcoin, Stablecoin USDC, DAI, USDT.
- Iron Bank. Allowlisted protocols can get loans with no collateral. On the other hand, investors can get a loan with excessive collateral. An important metric for users is the collateral factor, which indicates how much the maximum amount of coins can be borrowed against a particular other tokens. For example, let's say a coin worth $1000 is pledged with a 75% factor. So, up to $750 worth of other assets can be borrowed. Users can also supply liquidity to Iron Bank and earn passive income (typically set API of 2% to 40% per year on Stablecoins).
Yearn Finance has more handy tools to invest and earn. Choose the tool that is convenient for you to multiply your capital competently.
What are DeFi protocols?
DeFi protocols fall into two types:
- the first type allows users to lend and borrow cryptocurrencies
- the other will enable users to exchange one cryptocurrency for another, similar to decentralised exchanges
The most popular is the first type protocol - they allow anyone to borrow in a short period on attractive terms (2% to 10% interest rate), avoiding complicated procedures. However, borrowing from DeFi protocols has two significant disadvantages that limit the number of protocol participants.
The first is the over-collateralisation of the loan. At the moment, borrowing in cryptocurrency is possible with the condition of providing collateral of a more considerable amount (on the order of 150% of the loan amount) in another cryptocurrency. As a rule, such loans are of interest to a small category of traders involved in arbitrage transactions and margin trading. The second disadvantage is that the provision and repayment of the loan are only in cryptocurrencies that the aforementioned smart contracts can work with.
So, at this point, DeFi is a reasonably specialised market that sets new standards for financial products and, with high probability, shortly it will go beyond the cryptocurrency industry only.
The Yearn Finance platform uses two chains in December 2021: Ethereum and Fantom. Therefore, transaction processing speeds and fees will be different:
Ethereum shows a low throughput of 14-15 TPS. The average for a transaction is 0.6-1.2 min. But the speed can be increased by paying higher fees. Transaction processing rates should rise when the complete transition to PoS blockchain occurs, and fees should fall.
Fantom shows 4,500 TPS, taking 1 second to complete a transaction. This high speed is achieved using a directed acyclic graph (DAG), which could be the next step in blockchain evolution. Read more in the overview of the network and its native coin.
Initially, the project CEO only issued 30,000 yearn finance coins. All of them were distributed to liquidity providers. After the voting mechanism was implemented, the management rights were transferred to the holders. And on February 2 2021, they supported the proposal of YIP-57: "The Future of Finance (1670 in favour, 331 against), which increased the issue by 6666 tokens (at the exchange rate at the time: ~$218 million):
One thousand two hundred twenty-two tokens were distributed to early contributors, programmers. They were accrued gradually, according to a schedule.
Four thousand four hundred forty-four tokens (worth about $134 million) were allocated to launch a reserve fund. It will be overseen by yEarn.Finance.
The initiative's primary goal is to retain a position in the DeFi sector and attract new developers. In addition, users who are willing to buy yearn finance can be assured of security.
What affects the cryptocurrency rate
The coin is highly volatile. This is because a number of factors influence the price of digital currency:
- Aggregator platform development: adding new financial instruments, increasing TVL, collaborating with more networks and protocols.
- Sentiment in the cryptocurrency market: bullish or bearish trend.
- Changes in the price of the market flagship Bitcoin.
- Listing on new exchanges. For example, on August 10, 2020, the coin price surged 50%+ thanks to the launch of trading on the most prominent platform, Binance. Its rate then reached $6500.
- Actions of financial regulators.
- Increased interest in the DeFi sector and pharming.
- Launch and development of other projects by CEO André Cronje.
- Comments from venture capitalists, crypto analysts and media personalities.
Is Yearn Finance worth buying
Despite the popularity of the CEO of the project, whose name is associated with the entire decentralised finance sector, investing in the management coin is considered risky. The exchange rate of yearn finance has shown both sharp rises and falls, making the cryptocurrency interesting for traders. However, the platform is gaining popularity, so the coin is also becoming profitable for investors because of its features and its popularity. Create your future with smart investments. It's all up to you. Learn and earn. Good luck!