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Yearn Finance is a DeFi yield aggregator that runs on the Ethereum blockchain. It acts as a portal or gateway to various DeFi products with the aim of creating an intelligent and easy-to-use interface. Yearn Finance users can earn interest and maximize their cryptocurrency returns while saving money on transaction fees and time spent researching.
The platform is made up of several different products: Vaults, Earn, Zap, Cover, and the Dashboard. Although they have these different products, the idea is all the same. Yearn will take the tokens that are provided to it and allocate them to the most profitable lending providers and liquidity pools.
Yearn Finance Review: How to Use Yearn Finance
What is Yearn Finance?
Yearn Finance is a decentralized finance (DeFi) platform launched in July 2020, offering services like staking, lending aggregation, and yield generation on the Ethereum blockchain. It is known for its user-friendly crypto trading services and is managed through governance proposals voted on by holders of its native ERC-20 token, Yearn Finance (YFI).
The platform was founded by Andre Cronje without any initial funding and aims to simplify investing in DeFi products. Users can invest in other DeFi protocols and earn a percentage of the platform’s fees proportional to their YFI holdings. Yearn Finance offers products like Vaults, Zap, Earn, and APY, designed to maximize returns on crypto assets for its users.
What Are YFI Tokens?
The Yield Finance (YFI) coin has gone up 50 times since hitting the market. Owning YFI gives you a say in future governance and functions as a cryptocurrency. The interesting thing about the token is that they released the entire supply of just 30,000, and the founder, Andre Cronje, chose not to keep any for himself or the team. So, to get YFI now, users can only buy it.
What Are Yearn Finance Vaults?
Vaults are where you can deposit your assets and automatically use advanced strategies for higher risk and return—using strategies to automate the best yield farming opportunities available and minimise risk. These vaults were designed so the community could work together to build new strategies to find the best yield.
Vault strategies are generally more active than lending out your assets in the standard Yearn protocol. Vault strategies can do many different things to maximise the returns. These can include supplying collateral and borrowing other assets (such as stable coins), providing liquidity, collecting trading fees, farming other tokens, and selling them for profit. Strategies are created by the controller who manages the vault, with new strategies being voted on by the community through governance proposals.
By connecting up your Ethereum or web3 wallet, you can choose from the likes of depositing curve.fi LP tokens, ETH, Dai and Yearn Finance (if you’re lucky enough to have the tokens). With some huge earning potential.
However, Yearn Finance users cannot deposit ETH/WETH, and Yearn Finance’s official Twitter account announced that the team had paused the vault deposits.
Yearn Finance Earn
Earn performs profit switching for lending providers, moving your funds between different lending platforms. So you can deposit stablecoins such as Dai, USDC, Tether, and Susd, and they do have wrapped Bitcoin, too. Once deposited, Earn will get you the highest yield for your coins at all times by shifting your tokens between Aave, dYdX, and Compound.
Obviously, you could deposit directly into these platforms, but Earn differs from providing liquidity directly is that Yearn will automatically move your assets to the protocol with the best returns. In turn, this should save you money in fees as opposed to if you were manually moving the funds around yourself.
Like any lending protocol, once you’ve deposited, you’ll receive tokens back that represent your share of the liquidity pool, which are wrapped and returned to you. With Yearn, that’s “Y Tokens” similar to “A Tokens” with Aave, etc, which you can then Claim from the site.
Yearn Finance Zap
Zap is an access point for Zapper.fi, allowing users to swap various assets into pooled interest-bearing tokens. Zaps were originally made by DefiZap, which is now Zapper.fi, as an all-in-one DeFi routing service. You can zap into Curve.fi pools with DAI, USDC, USDT, TUSD and BUSD. Then, zap out of the curve. finance tokens to receive stable coins in return.
Yearn Finance Cover
yInsure, which is also known as Cover, provides insurance against smart contract risk and is underwritten by Nexus Mutual. The great thing about this insurance is that there’s no KYC required.
And it’s is a pooled coverage system providing pooled insurance coverage.
yInsure, it’s made of 3 components. “Insurer Vaults”, which hold the assets that are used to insure claimants, then there’s “Insured Vaults”, which hold the assets claimants desire to be insured and finally “Claim Governance”, which represents the insurance arbitration process.
There are several contracts available to insure, and users simply state a term (above 30 days) that they’d like covered for and enter the amount that they’d like covered, and the quote details, including cost, will then display.
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