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Know Your Digital Asset: Yearn.Finance (YFI)

Know Your Digital Asset: Yearn.Finance (YFI)

There are thousands of cryptocurrency available in the crypto space today. However, not all can be considered reliable for investment in digital assets.

In this series of Know Your Digital Asset (KYDA) series, we will explore cryptocurrencies in which are widely accepted by regulated exchanges and with real-case use.

Have you heard about Yearn.Finance (YFI)? If you haven’t heard about it since the Decentralized Finance (DeFi) craze started, you have been missing out. Let’s explore how this governance token highly valued that it surpassed Bitcoin’s all-time high price (so far).

What is Yearn.Finance?

It is all started when Andre Cronje managed funds for his family and friends to get the best annual percentage return (APR) from stablecoins. Imagine had to do things manually from different sites until he decided to make it easier.

Andre leads a group of developers to create Yearn.Finance bringing more features than just yields aggregator. The Yearn.Finance ecosystem offers yields switcher, stablecoins leverage, pool liquidity, automated market maker, insurance, and borrowing.

The Governance

The Yearn.Finance operates in a decentralized manner that allows users in the community to propose and implement features or changes through voting. It utilizes the governance token called YFI.

Currently, there are only 30,000 YFI distributed. The only way to obtain YFI is to buy it from crypto exchanges. According to Andre, the governance token is valueless, and he didn’t keep some for himself.

While it is possible to increase YFI supply through governance meaning, the community can propose and vote for it to pass.

The price speaks louder.

In August, YFI price hit an all-time high (ATH) at $13,370 while surpassing Bitcoin (BTC) price at the time. However, YFI ATH so far topped at $43,678 in September 2020. It was followed by a market correction in early November around $8,500.

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Several prominent crypto figures on Twitter, like the CEO of Bitmex, Arthur Hayes, predicted that YFI to reach $100,000 based on the total supply limit.

The Token or The Product

While the YFI price action alone sounds more exciting for high-risk investors, it is undeniable that Yearn.Finance platforms made the DeFi experience simpler.

The ability to invest and earn the highest yield effortlessly should be a refreshing finance experience that conventional banks unable to offer. In a simple perspective, users can put their money to work without extra steps such as going to the banks, signing documents, dealing with intermediaries, and more.

For Malaysians, YFI is not an approved digital asset and not available in any Digital Asset Exchanges (DAX).

In case you are wondering, Andre Cronje has other projects on the work. Do learn about it.

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