Yearn.finance (“yEarn”) is a DeFi yield aggregator and optimizer.
yEarn uses a suite of DeFi protocols and primitives including yTokens and delegated vaults to maximize yield.
YFI is yEarn’s governance token. YFI is an ERC-20 token used to vote on yEarn improvement plans (“YIPs”) and new yield strategies for liquidity providers. Token holders can stake their YFI through the governance portal to earn a percentage of fees generated by the protocol.
yEarn was launched in early 2020 and initially optimized yield across Compound, dydx, Aave, and Fulcrum. yEarn has continued to add new DeFi products including yleverage.finance and ypool.finance.
In mid-July 2020, yEarn announced the release of the YFI token. Given the number of configurable parameters in yEarn, the YFI token is used by the community to govern the protocol. There was no pre-mine, sale, or allocation for investors/team. YFI was only earned by providing liquidity.
30,000 YFI tokens were minted and have been fully earned/distributed among the community. The community is currently working with firms such as Delphi Digital and Gauntlet to construct an optimal token model and inflation schedule.
A 6/9 Gnosis Safe multisig has been granted full rights over the YFI governance contract. YIP 40 proposes replacing inactive multisig signers with four new signers.
Since the launch of YFI, yEarn has grown from $8M to over $1 billion in total value locked (“TVL”).
YFI Liquidity Venues
YFI trades on decentralized exchanges including Uniswap and Balancer, as well as centralized exchanges including Binance and FTX.
YFI Holder Base
- yEarn has one of the most engaged and active communities. This has translated into a YFI holder base looking for liquidity/leverage on their YFI. Compound could become the first DeFi platform to offer liquidity on YFI, further increasing borrow demand and utilization of assets on Compound.
- Initially, the community may see value in having a collateral factor of 0% to reduce risk to lenders. Additionally, if passed, the borrow limits proposal may help mitigate risk to lenders.
- YFI is a relatively new token with a limited track record of volatility and trading history.
- yEarn multisig and its potential exposure to lenders.
While the community has not recently launched new markets, we see value in starting the discussion around new markets on Compound.
We would like to gauge the community for feedback.