The past two years, in particular, have been tremendous for the DeFi world and DeFi protocols as many new projects surfaced to become a great success. The reason behind that is that they are bringing ease to their users through smart contracts and other vitalities. This all-encompassing ecosystem encouraged the creation of a whole DeFi scheme known as yield farming.
With yield farming, the environment of earning lucrative interest on the trading of tokens and coins became more common. The whole system was appreciated by all those users who found active and speculative trading a bit risky and found their peace in passive earning through various DeFi protocols. However, when the system was new, there were huge ups and downs in prices of tokens, which in turn brought instability. To solve that, platforms like Yearn Finance came into being.
Yearn Finance is a bundle of Decentralized Finance protocols that run on the Ethereum blockchain. Launched by an independent developer Andre Cronje in 2020, Yearn Finance works on the single goal of equipping its users with the right platform to earn huge rewards on their token holdings. It amalgamates various services, including lending aggregation, yield generation, and insurance on the Ethereum blockchain. Thus, ensuring more usability and feasibility for the users. The YFI crypto holdings from these users add more stability to the platform.
YFI is the native crypto of the project. It is a governance token that entitles its holders with the right to vote to decide the platform's fate. Yearn Finance focuses on providing you with the best yield farming options available on the Ethereum blockchain. Meanwhile, it also grants you the power to have a say in the decision-making process.
The protocol consists of a number of different decentralized products. Here are some of the main features of the protocol:
APY stands for Annual Percentage Yield. It represents interest rates across different lending protocols and calculates a time-based measurement of the Return on investment for an asset.
Through vaults, Yearn Finance presents their users with different investment strategies that would produce maximum earnings. Yearn vaults are programmed to provide the best lending aggregator and optimized yield farms.
A type of lending aggregator, Earn, automatically shifts funds between different areas such as the dYdX, AAVE, and Compound when there is a change in the interest rates of these protocols to make sure you earn the highest margins.
The Zap section allows its users to perform several trades with one click saving their money and time and cutting down on gas fees. Another benefit of this protocol is that it provides an insight into the users' Defi investments and assets.
Yearn Finance works by deploying contracts to the Ethereum blockchain and various decentralized exchanges running on it. In Yearn Finance, users earn most of their profits through yield farming. They lock their assets on the blockchain, increasing its value and strengthening it.
In addition to that, the major services offered by Yearn finance, such as the APY, ZAP, and Earn, entitles its users to earn through trading and lending crypto assets. For example, Earn allows you to find the best rates across different protocols available. Furthermore, it explores different lending protocols such as Compound and Aave to find the ones that are currently offering the best interests. However, the ratio of your earnings depends upon the amount of yearn crypto stored on the protocol.
Yearn Finance has developed a secure ecosystem for users to earn through lending, trading, investing, and holding tokens. They can take full advantage of all the protocols offered and the YFI token that they can farm by providing liquidity to the network and depositing capital into different yearn protocols. The launch of YFI is being accredited as the fairest launch since Bitcoin.
As discussed earlier, the YFI token is an ERC-20 token that governs the platform and used as a user reward. It was launched with a fixed supply of about 30,000. However, it is possible to increase the coin supply with the consent of the community members. It had no pre-mined tokens at the time of its launch. It can also be assumed that its price has the potential to go up because of its limited supply.
Swapzone is a credible platform that offers thousands of crypto pairs to exchange those crypto assets you own into other currencies. With its user-friendly interface, any user can convert any crypto token in a matter of a few clicks. Many users question how to convert other cryptos, like Bitcoin to YFI. They can do so on Swapzone by following these below-mentioned steps.
If you’re a visual learner, see how to exchange your BTC to YFI tokens in one of our step-by-step video tutorials: