Yearn.finance is a DeFi platform offering a suite of financial products. It operates on the Ethereum and Fantom blockchains and was launched with the aim of helping users boost returns on their crypto by streamlining lending and trading in ways that are simpler, cheaper, and more efficient. Its main offerings include yVaults, Earn and Iron Bank. Because Yearn.finance delivers its services through smart contracts, it can execute exactly as coded and reduce the need for third-party transaction verification, lowering both costs and time.

Yearn.finance was founded in 2020 by independent developer Andre Cronje, and its native asset, the YFI token, went live in July 2020. In the month right after launch, the yearn.finance ecosystem pulled in nearly $800 million in assets, highlighting how quickly it gained traction as a DeFi project.

What are Yearn.finance’s key features and how does it work?

A standout aspect of Yearn.finance is its range of products. yVaults, its most intricate offering, works much like actively managed mutual funds. Users supply crypto to yVaults, where each vault may include up to 20 strategies. After that, deposits are routed through those strategies as guardians and strategists oversee them. The system can shift capital via rebalancing, move funds through shifting mechanisms, and use auto-compounding, with the goal of pursuing the best possible returns from other DeFi protocols. 

yVaults does not take deposit or withdrawal fees, but it does apply a 20% performance fee and a 2% management fee. Auto-compounding helps cut costs: rather than paying a transaction fee each time yield is compounded manually, yVaults bundles transactions across many depositors so the per-depositor cost is lower.

Iron Bank provides lending for both users and protocols. Loans to users are overcollateralized, while loans that are approved for protocols are zero-collateral. 

APY (Annual Percentage Yield) serves as a reference database of interest rates offered by the lending protocols, giving users estimates of potential annual earnings.

The Zap feature lets users deposit most tokens into a vault quickly by bundling multiple investment steps into one click. It automatically swaps tokens into the versions required for yVault (as long as slippage stays below 1%) and deposits the assets into a yVault in a single transaction. The design is intended to reduce both time and transaction fees.

What is noteworthy about Yearn.finance? 

The YFI token is the native governance asset for the yearn.finance platform. That means YFI holders can vote on platform regulation proposals, even though anyone can submit proposals-only YFI holders are able to vote.

YFI can be obtained through yield-farming, where users lock cryptocurrencies within yearn.finance using smart contracts (including Vaults and Earn).

What can Yearn.finance be used for?

The yearn.finance platform supports several core use cases, with the main ones being lending and trading of cryptocurrencies. Many of its products are built to support these activities.

Where can you buy YFI?

YFI can be purchased on the CEXs and DEXs listed here.