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Yearn.finance (YFI) Price Prediction and Analysis

Dec 2, 2020

What is Yearn.finance (YFI)

Screenshot of Yearn.finance Interface

Yearn is a platform for aggregating liquidity from other DeFi projects such as Aave, dYdX, Compound, and Fulcrum. What got the attention of the crypto community is a potentially higher return on aggregate liquidity. It currently has over more than $700 million worth of digital currencies being locked up in its platform.

How does Yearn.finance work

Crypto holders can stake their coins on multiple DeFi platforms simultaneously, thus getting higher yields. The Yearn.finance protocol moves the funds between Aave, dYdX, Compound, and Fulcrum, depending on which service provides a higher income.

Currently, the platform accepts several stablecoins and coins, including DAI, USDC, SUSD, USDT, TUSD, LINK, BAT, ETH, MRK, etc. A user sends coins to the protocol, and they are exchanged to yTokens (LINK is swapped to yLINK). YTokens are distributed between the “pools” with the highest potential profit. Also, the part of these tokens are deposited to yield.fiance pool available only to YFI holders.

In fact, the process is much more complicated and contains complex operations to maximize income on users’ deposits. We just explained the basic concept without going much deeper into the details.

What is YFI Token

YFI token is a governance token of the Yearn.finance platform previously called iEarn. YFI holders can vote and participate in the governance decisions about supply, token distribution, etc. Another part of governance is creating different strategies of optimized asset distribution to maximize possible yield. The community posts these strategies, and YFI holders vote for the best to put them into action. A share of profits from these strategies goes to users.

How to get YFI token

There were three ways to get YFI tokens described by the founder of Yearn.finance:

Deposit DAi and YFI into the Balancer protocol. Then these coins will be exchanged for the BAL tokens. As a result, you can deposit BAL tokens into YGov in exchange for YFI.

Deposit a stablecoin to Yearn.finance. They will be converted into yTokens, which can be used to get the YFI tokens.

Deposit YFI and yCRV into the Balancer pool. Get BPT tokens and deposit into YGov to get the YFI tokens.

In a nutshell, the users who provided the liquidity to these platforms were rewarded with the YFI tokens. There are only 30000 YFI, and all of them were distributed among users. Theoretically, the YFI tokens can be minted if the token holders allow it. But today, the simplest way to get YFI tokens is to buy them on the exchange, as they are widely traded on different platforms.

It is currently believed to be the most decentralized token in the crypto industry because it has no pre-mine, pre-sale, and no allocation to the developer team.

If you are looking for the wallet to store your YFI – take a look at Freewallet: Crypto Wallet. Store and manage YFI and 100+ other coins on iOS, Android and desktop via web application.

YFI token price analysis

According to YFI creator Andre Cronje, the token has no intrinsic value.

“In further efforts to give up this control (mostly because we are lazy and don’t want to do it), we have released YFI, a completely valueless 0 supply token. We re-iterate, it has 0 financial value. There is no pre-mine, there is no sale, no you cannot buy it, no, it won’t be on uniswap, no, there won’t be an auction. We don’t have any of it.”

USD value graph in yearn.finance

However, it seems that the community disagrees with Yearn.fiance founder. The currency became so hyped that one token cost even more than one Bitcoin. Currently, there are more than $700 mln. worth of digital coins locked in this service, making Yearn.finance to be in the top 10 DeFi projects.

The coin was launched in July 2020, and by the end of the month, YFI managed to jump four times higher from $900 to $4000. Later, the token was added to the Binance exchange leading to price growth of up to $6500. And in a couple of days, the price of YFI doubled to $12000.

On September 13, the coin reached its ATH of $42000 thanks to the Coinbase Pro listing announcement. By the time of writing, the asset is traded at $23000.

Huge market demand for YFI on the exchanges, a significant amount of locked assets in the project indicates that the voting rights to decide the future of the Yearn.finance DeFi project are highly valuable.

Also, a vital factor of this high demand is insufficient total supply, unlike other projects in the cryptocurrency industry. The total maximum supply of 30000 coins along-side the project’s popularity, makes YFI a highly valued asset.

YFI Price Prediction for 2020-2025

When it comes to predicting the future price of a coin, it is always tricky to understand exactly where the digital asset will move next in this volatile sphere. We will share some thoughts of crypto experts about the future price of YFI token.

The CEO of Bitmex, Arthur Hayes, has several times expressed his prediction that the price of Yearn Finance (YFI) will eventually hit $100000.

Screenshot of a tweet by Bitmex CEO Arthur Hayes

Jordan Spence – the Chief Marketing Officer of MyCrypto, also shared his high hopes for YFI token. He waits for the coin to rise up to $100000.

Screenshot of tweet by MyCrypto CMO Jordan Spence

We scanned a few popular analytical websites that provide price prediction for YFI tokens. For example, Digital Coin Price delivers a very positive Yearn.finance forecast for the next five years. For instance:

2021 – USD 36061
2022 – USD 40853
2023 – USD 51307
2024 – USD 59228
2025 – USD 70375

The Wallet Investor web portal has an even more positive YFI price prediction, which correlates with the thoughts of Jordan Spence and Arthur Hayes:

2021 – USD 27000
2022 – USD 47000
2023 – USD 67000
2024 – USD 87000
2025 – USD 101000

Conclusion

When most financial services offer small or almost no returns, Yearn.finance manages to provide up to 100% APY. Thus the right to participate in the future development of the project with YFI governance tokens is highly valued by the community.

If the service keeps the same income level, we will probably see one of these YFI forecasts come true.

Disclaimer: Please note that this article is not financial advice and serves only as informative material. The cryptocurrency market suffers from high volatility and regulatory uncertainty. You should do a substantial amount of research before engaging in financial activities with cryptocurrencies.

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