What is Decentralized Finance (DeFi)?
Decentralized finance are structures where users interact with a single wallet from anywhere in the world. Since decentralized finance applications are open source, they can be controlled by anyone, do not have a centralized structure, and users can create their own applications by forking whenever they want.
What is Yearn.finance (YFI)?
Yearn.finance is a protocol on the Ethereum (ETH) network that allows users to borrow and trade cryptocurrencies.
The application grows in the DeFi space, providing incentives without any third party application. In addition, its own token YFI is treated as a kind of incentive.
Yearn.finance has several different standalone products:
- APY: It shows interest rates over different borrowing protocols.
- Earn: It shows the pool with the highest interest in case you lend.
- Vaults: Shows which of users’ other DeFi projects will yield the highest returns.
- Cap: It saves you from cost and work by creating several different baskets.
Users can lock YFI tokens for trading via Balancer and Curve.
This allows you to perform yield farming. In the Yield farming process, users lock their cryptocurrencies on the platform for a reward.
How Does Yearn.finance Work?
Yearn.finance is a project that enables it to connect to other decentralized exchanges (DEX) through the Ethereum network. In this way, users can rely on YFI contracts and perform different transactions.
Debt Transactions and Trading
Most of Yearn’s services allow for cryptocurrency transactions.
Earn is a product that aims to provide the best returns, such as Aave and Compound. Users can deposit DAI, USDC, USDT, TUSD and sUSD on the platform against interest.
Zap, on the other hand, allows it to make several different investments with a single button. For example, users can trade their DAI with yCRV. This saves time and money.
Vaults allow traders to create active investment strategies. In this way, the safes function as a kind of managed joint funds.
Although it may seem complicated from a distance, investing in the safe is actually simple. Thanks to the application interface, it allows them to deposit cryptocurrencies easily and the returns of all funds can be seen easily.
What is Yearn.finance Token?
YFI is seen as the governance token of the Yearn protocol.
30,000 YFI has been distributed so far. But according to the document, more Yearn.finance can be issued when required.
YFI can be easily purchased and users need to stake YFI to have a say in the protocol. After completing the staking process, they can have a say in the operations in the protocol. But as soon as they do the staking process, they cannot withdraw for three days and receive a small fee in return.
Yearn charges a 5% fee for withdrawals. The high fee is distributed to the provision of the treasury and YFI holders.
What Happens When Users Make a Deposit?
Users buy tokens to prove their stake in the liquidity pool. The stock exchange token is commonly used for yield farming and can be difficult for those who do not perform yield farming.
When people deposit their tokens in pools, you may not get anything. It allows you to receive your money in your account and your deposit with your ID.
But DeFi protocols don’t work like banks. On the contrary, you will receive a certain rate of interest for your transactions to your wallet address. In order to get your deposit back, you need to get it back using your tokens.
In return for the tokens you deposit, the protocol gives you proof of your deposit. Tokens prove your deposit and allow you to receive your tokens at any time interval. In addition, tokens can be sold on another platform.
Yearn, which started with stablecoin, offers transactions against different cryptocurrencies over time and is expected to increase over time.
Yearn allows users to deposit their tokens through automated market makers (AMM) for easier deposits. For example, if you deposit USDT, you will receive yUSDT, which is the proof of your investment.
If you want to understand what is done with Yearn vaults, you need to look at smart contract codes. Feel the Yearn gives you an overview of what is happening in the vaults. However, some areas remain incomplete.
In some ways, the Yearn protocol manages to protect investors. Especially when you are knowledgeable in the field of DeFi, you can protect yourself against different risks.
How to Buy Yearn.finance?
YFI can be purchased both from the Year protocol and through exchanges. If you are buying from exchanges, you can easily buy it when you have an account on exchanges such as Binance, Huobi Global, Coinbase Pro, Bithumb and Bitfinex. You can use trading pairs on exchanges, including YFI / USDT, YFI / USD, YFI / BTC and YFI / EUR trading pairs.
The current price of the YFI is set at $ 71.850.00.