The Hottest Crypto in Town — Yearn.Finance

By Avi Ben Ezra Thursday, September 17, 2020

Yearn.Finance (YFI) has seen its price rise a mouth-watering 935% since the beginning of August, in market cap in just a month. Yearn’s current market value sits at nearly $1.2 billion, enough to push the digital coin inside the list of 20 largest cryptocurrencies at the moment.

Yearn.Finance is used as a portal for different DeFi assets. Stablecoins are moved between Compound, Aave, dYdX, and Curve depending on which asset pool is offering the highest yield. The purpose of using Curve is to increase rewards in yEarn tokens.

The New Hot Thing

As another player in the decentralized finance (DeFi) sector, Yearn.Finance is arguably the hottest story in the crypto market now. Media started to follow this story more closely after the platform’s founder — Andre Cronje — decided to distribute all mined tokens to investors who supported the project by making deposits in key liquidity pools of the project.

It is estimated that the current circulation on YFI — Yearn’s native token — is around 30,000. All of them are distributed so far with a chance of more being created through governance. However, some crypto analysts don’t believe that this is going to be the case.

“I think the ‘no inflation’ meme is here to stay. I think there are other ways for the system to monetize,” said Gauntlet Network’s Tarun Chitra, who is also one of the platform’s multisig members.

He adds that expectations are that YFI will continue to gain. The DeFi platform reportedly asks for a 5% fee per withdrawal.

Data by Buy Shares also showed that Yearn’s comparatively limited quantity may be responsible for its inflated value when compared to other cryptocurrencies.

YFI’s incredible growth opposes the recent statements by the Indian thinktank ‘Begin India’ that turning cryptocurrencies into private currencies jeopardize entire economies.

It looks like the Indian opposition has arisen from its connections with illicit uses, a criticism that the sector is attempting to get rid of.

Leon Gauhman, Chief Strategy Officer at the digital product consultancy Elsewhen, said that beating the opposition could bring some serious benefits.

“Undoubtedly [cryptocurrencies] will be subjected to close regulatory scrutiny because of concerns about their role in [fueling] the shadow economy. Assuming they can overcome this hurdle, the payback will be greater legitimacy in the banking marketplace.”

A few days ago, Coinbase, one of the world’s largest crypto exchanges, announced it will roll out support for YFI on Monday, September 14.

“Once sufficient supply of YFI is established on the platform, trading on our YFI-USD order book will launch in four phases, transfer-only, post-only, limit-only and full trading,” the exchange wrote in a blog post.

The exchange described Yearn.Finance as a “decentralized finance (DeFi) platform which aims to perform a host of functions such as aggregated liquidity and automated marketing making by moving providers’ funds between platforms such as dYdX, Aave, and Compound.”

A Vertical Move Higher

According to a YFI/USD technical chart posted on TradingView.com on September 15, the investing community witnessed a vertical move in the price of this digital asset in the past few weeks. The ascendance started in mid-August, pushing the price from around $5,000 to nearly $40,000 in just two weeks.
Price movements then pulled back, most likely on profit-taking activities by early investors, before another push higher was started. A new wave of buying YFI culminated on September 12, when the price logged fresh all-time highs near $44,000.

The latest uptrend in price action was hugely supported by Coinbase news, given that YFI gained 23.58% on the day when the exchange announced it will list the coin. The buyers may want to push the price to the psychologically-important level of $50,000.

Summary

The newly-launched DeFi asset Yearn Finance logged a parabolic move higher, pushing its market cap above the $1 billion mark in just a few weeks' time.

Yearn.Finance serves as a gateway to a group of yield-generating products in the Ethereum ecosystem and around $650 million has entered into DeFi’s Yearn.

About the Author


Avi Ben Ezra

Avi Ben Ezra is the Chief Technology Officer (CTO) and Cofounder of SnatchBot and SnatchApp (Snatch Group Limited). He leads the Group’s long-term technology vision and is responsible for running all facets of the tech business which includes being the architect of the platforms and UI interfaces.

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