In 2020 decentralized finance has been the talk of the town. This summer, some DeFi coins have even managed to surpass Bitcoin in value, including Yearn.finance (YFI), which has become an important part of the DeFi sector very rapidly. We’ve closely examined YFI to discover what makes this token special and why there’s been so much buzz around it recently.
What is YFI?
YFI is the native governance token for Yearn.finance, a community-driven robo-advisor of various yield-generating products in the Ethereum ecosystem. It was once called a troll token because it actually has a zero supply and no monetary value, but it helps many DeFi products increase their liquidity. The Yearn platform's idea is to create a simple, intuitive interface for all decentralized finance and facilitate access to innovations that make the DeFi sector blow up.
Who created YFI?
Yearn.finance, and YFI token was developed by Andre Cronje, a DeFi architect at Ethereum. He got started in crypto back in 2018 when he worked as a Blockchain Protocol Advisor at BitDiem. Since then, he has worked in several recognized blockchain organizations, such as AI-powered gaming audience analytics platform Aggero, the all-in-one cryptocurrency wallet CryptoCurve the popular media outlet CryptoBriefing. Cronje came up with creating YFI tokens mostly because the Yearn team wanted to give up control over the platform and hand over the reins to YFI holders. To participate in governance and get dividends, they have to stake their YFI and cast a vote.
How does governance work?
Like many DeFi projects, Yearn has a governance forum on its website with one of the most active communities and many proposals regarding different vaults. Users post their strategies, and then, in case they get approved by YFI holders, they come into force and help the platform grow. A portion of profits earned from voting goes to users. Those who are willing to participate in governance might want to visit Boardroom, a portal for participation across many projects in DeFi, which recently integrated YFI.
What’s behind YFI’s surge?
The combination of smart tech, new products, yield farming, and the latest buzz around DeFi liquidity pools likely fueled the popularity of YFI, which really took off in late July 2020. The vast array of functions — from aggregating liquidity to automated market-making — has pushed Yearn.finance to the top of crypto finance. In mid-September, Coinbase announced that YFI would be available for trading on Coinbase Pro, which saw its price immediately jump. Although the YFI rate has corrected itself after an explosive rally, it’s still higher than BTC’s, and the huge potential of this DeFi coin remains.
Where can I store YFI?
If you got some YFI and are now searching for a secure storage spot to keep your tokens safe, Freewallet: Crypto Wallet for iOS, Android, or the web is the way to go. With Freewallet, you can sleep soundly, knowing that your YFI is protected with top-notch security features, including 2FA, multisig, and transaction limits. The majority of assets are kept in cold storage, eliminating any threats your YFI tokens could face from any potential hacker attacks.