yearn.finance Price

What Is Yearn Finance (YFI)?

Yearn.finance, also known as Yearn Finance (YFI), is an Ethereum-based, multi-chain decentralized finance (DeFi) platform that offers automated yield optimization and aggregation services. Crypto investors may use Yearn Finance to maximize their returns by depositing funds on the platform. Yearn handles the investments by allocating them to a variety of liquidity pools on other DeFi protocols to derive the best possible yields.

Yearn was launched in July 2020. It gradually expanded its services, investment options and technical features, introducing V2 of the protocol in January 2021 and V3 in May 2022. Yearn’s native cryptocurrency is YFI, an ERC-20 standard token.

What Is YFI Used For?

YFI’s key function is governance. Token holders have the right to stake their YFI and participate in the formal voting process on the platform. In YFI’s terminology, staking refers to a temporary lockup of funds on the protocol for governance purposes. The standard lockup period for each vote is three days. YFI holders are rewarded with a proportion of the protocol’s earnings for taking part in the voting process. As such, Yearn is among the very few protocols in the crypto world that pay rewards in exchange for governance voting.

The YFI token may also be invested on the platform to earn yields. Additionally, several popular DeFi protocols such as SushiSwap and Curve Finance accept YFI deposits on their platforms. On these DeFi platforms, the token can be used to earn yields in a variety of YFI-based pools.

YFI Price and Tokenomics

On its first trading day on the market (July 18, 2020), the YFI token was valued at around $790. During that day, the Yearn Finance price touched its all-time-low price of $31.65, and then set out on a confident growth trend that lasted until mid-September 2020. In September, the YFI token reached its 2020 highest price of over $43,000 as the market reacted positively to the new platform’s innovative business model and the scarce levels of the token’s supply.

After the initial enthusiasm had worn off, YFI had a significant downward correction, sliding to approximately $8,500 by early November 2020. From that point, YFI experienced a relatively long period of growth, hitting its all-time-high price of $90, 786.89 on May 12, 2021.

The overall crypto market’s turbulence in 2021 and 2022 didn’t spare the YFI token, either. Between May 2021 and June 2022, YFI was on a downtrend, declining to around $4,400 by mid-June 2022. As the market stabilized in June, the token managed to snap out of its more-than-year-long decline.

YFI is a supply-capped token. During the initial distribution, 30,000 YFI were given to liquidity providers on two popular DeFi protocols, Curve (CRV) and Balancer (BAL). These two automated market maker (AMM) protocols were among the primary platforms used by Yearn.finance for yield optimization.

The 30,000 YFI distributed in this manner represented the token’s maximum and total supply at that time. This relatively low number of tokens ensured that each YFI was worth thousands of dollars — and, at times, tens of thousands — on the market. The minuscule 30,000 supply is in stark contrast to most other crypto projects, which typically issue millions or billions of units for their native cryptocurrencies.

In February 2021, the Yearn.finance user community voted to increase the total and maximum supply to 36,666, still a very modest count for a crypto token supply. Nearly all of that amount represents YFI’s circulating supply.

Who Is the Founder of Yearn Finance? 

Yearn.finance was founded by South African software developer Andre Cronje. Cronje is a well-known figure in the crypto industry. Before founding Yearn.finance, he was a technical advisor to the Fantom blockchain and chairperson of the Fantom Foundation’s Technology Council. 

In early 2022, Cronje announced his withdrawal from the industry and all of the projects — including Yearn Finance — in which he was involved. This announcement created a degree of panic among the Yearn Finance user community, due to Cronje’s pivotal role in the project. However, since Yearn is a decentralized, self-governed platform, Cronje’s departure didn’t create any stoppage in its operations. After an initial, short-lived commotion due to its founder’s departure, Yearn.finance continued its operations as usual — a testament to the resilience of the decentralized, blockchain-based operating model.

Yearn is the undisputed leader among yield aggregator platforms. The project has attracted investment from many blockchain-focused investors, including Blockchain Capital, Delphi Capital Management, Framework Ventures, Genesis Block Ventures and Spartan Group.

How Does Yearn Finance Work?

Yearn.finance’s default platform operates on Ethereum (ETH). Additionally, Yearn’s services are available via Fantom, Arbitrum and Optimism. Users lock their investments on the platform in optimized yield farms called “yVaults.” Each yVault is a complex smart contract-enabled locker. The funds from the locker are invested by Yearn Finance in a variety of DeFi protocols, such as decentralized crypto exchanges and lending/borrowing protocols like SushiSwap and C.R.E.A.M. Finance, with the goal of yield maximization.

Each yVault has “strategies” linked to it. The strategies represent different fund allocation schemes used to arrive at better yields. In the initial version (V1) of the Yearn Finance protocol, each yVault could have only one strategy. Starting from V2, each yVault may contain up to 20 different strategies, giving users more flexibility for their yield farming.

When you lock funds in a yVault, you’re issued a type of synthetic asset called yVault Tokens. The yVault Tokens act as your deposit receipt. As your investment in various protocols results in positive returns, the yVault Tokens issued to you appreciate accordingly in value to reflect the growth. 

Yearn charges two types of fees. There’s a performance fee of 20% charged on returns generated by your yVault. Naturally, there’s no performance fee payable if your investment generates negative returns. Additionally, there’s a management fee of 2% charged on all investments, irrespective of their performance.

Before V2, Yearn also charged users for withdrawing funds from their yVaults. Since V2, the withdrawal fee has been abolished.

What Makes Yearn Finance Unique?

Automated Yield Aggregation

Yearn.finance allows you to take a hands-off approach to crypto investment and yield management. Instead of evaluating a multitude of DeFi protocols and pools, you simply invest your funds on the platform and rely on it to automate your yield farming. Being the largest yield aggregator by a large margin, Yearn Finance has aggregation capabilities unmatched by any other similar platform.

Limited Token Supply

The YFI coin has a relatively low supply level of only around 36.6K, which helps it maintain a high value in the market. Coupled with the token’s supply capping, this makes YFI a great investment option.

Rewards via Governance Voting

Yearn pays you crypto rewards in YFI for your participation in governance voting. Very few protocols reward their users for merely voting on the platform.

How to Store YFI

The YFI token conforms to Ethereum’s ERC-20 token standard. As such, it can be stored in a variety of wallets supporting this standard. Some of the popular wallets for ERC-20 tokens include MetaMask, Brave Wallet, Trust Wallet, MathWallet, Ledger and Trezor.

Where to Buy Yearn Finance (YFI)

You can buy YFI from any top crypto exchange, including Bybit.

How to Buy YFI on Bybit

To purchase YFI on the Bybit exchange, follow these simple steps:

1. Head to Bybit’s spot trading page (Home → Trade → Spot Trading).

2. Select the YFI/USDT pair on the left side of the page.

3. Choose the type of order you’d like: Limit Order, Market Order or Conditional Order.

For Limit Orders:

1. Select Limit.

2. Enter the order price.

3. Enter the number of YFI you wish to buy.

4. Click on Buy YFI.

5. Once you’ve confirmed your information is correct, click on Buy YFI.

6. View your order details under Active on the web page, or Orders if you’re using the Bybit app.

For Market Orders:

1. Select Market.

2. Enter the amount in USDT you’ve paid to buy YFI.

3. Click on Buy YFI.

4. Once you’ve confirmed your information is correct, click on Buy YFI.

5. View your order details under Filled.

For Conditional Orders:

1. Select Conditional.

2. Enter the trigger price.

3. Choose to execute at Market Price or Limit Price.

1. Market Price: Order price doesn’t need to be set.

2. Limit Price: Order price needs to be set.

4. According to order types:

1. Market Buy: Enter the amount in USDT you’ve paid to buy YFI.

2. Limit Buy: Enter the number of YFI you want to buy.

5. Click on Buy YFI.

6. Once you’ve confirmed your information is correct, click on Buy YFI.

7. View your order details under Conditional on the web page, or All Orders → Current Orders on the Bybit app.

For more help, visit the Bybit spot trading guide.