Yearn Finance - USA

Yearn Finance turned a lot of heads during the summer of 2020 – also known as DeFi Summer – after its token, YFI, rose from $3 to past $30,000 within months.

What Is Yearn? A Guide to the Gateway of Decentralized Finance

Yearn.Finance, a pioneer of decentralized finance, aims to be the “Amazon of DeFi” with automated investments and more than 20% yields. Here’s how it works. Yearn.Finance turned a lot of heads during the summer of 2020 – also known as DeFi Summer – after its token, YFI, rose from $3 to past $30,000 within months.

Founder Andre Cronje, a South African developer who worked on a myriad of cryptocurrency projects and later quit in March 2022, launched Yearn in early 2020 offering an easy-to-use gateway for those who wanted to automate their cryptocurrency investments to earn the highest yields.

Users quickly flocked to Yearn after its launch, locking $1.5 billion into the platform by September 2020. At its peak in November 2021, the total value locked in the network passed $6 billion, according to data.

While the token’s price retreated since then, the decentralized finance (DeFi) platform still offers yields over 20% annually that makes it attractive during times of high inflation for crypto investors.

What is Yearn.Finance?

Yearn.Finance has been one of the pioneers of decentralized finance (DeFi), an umbrella term for automated, blockchain-based financial services that let investors lend, borrow and earn yields on their crypto assets.

Built on top of the Ethereum blockchain, Yearn.Finance is a smart contract protocol that works like an Amazon marketplace for interest-bearing crypto products.

It aggregates the offerings of other DeFi protocols such as Aave, Curve and Compound and helps investors find the highest yields on the market so they can optimize their crypto investments for the best returns by “profit switching.” This simply means automatically moving funds around to make the most of the best interest rates.

The yield can come from gas fees, trading fees, staking rewards and lending interests.

What you can do with Yearn

First, you have to connect your crypto wallet to the Yearn.Finance protocol.

There are a dozen available wallet options, from hot wallets to cold storage, that Yearn can connect to including MetaMask, Coinbase Wallet, Ledger and Trezor.

Users can deposit crypto to their Yearn accounts through various blockchains that are integrated into the protocol: Ethereum, Fantom, Arbitrum.

Then, users can earn a yield by choosing different lending pools and strategies called vaults.

Vaults let users hold an asset they like while also earning yield denominated in that asset, so they can grow their stack. For instance, people who hold SUSHI, the token of decentralized exchange SushiSwap, can earn SUSHI by letting Yearn put their holdings into work.

Users deposit the asset into a vault and then Yearn borrows stablecoins against the asset. The stablecoins are then used to seek yield-farming opportunities, constantly rebalancing as opportunities shift.