yearn.finance (YFI)
Yearn Finance is a decentralized finance (DeFi) platform designed to simplify the process of generating risk-adjusted returns. It achieves this by converting resources from various DeFi platforms into synthetic assets, offering lending protocols, liquidity pools, and yield farming strategies. The platform utilizes established DeFi protocols such as dYdX, Aave, Curve, and Compound and was launched in February 2020, initially named iEarn, before rebranding to Yearn Finance in July 2020 with the introduction of the YFI token, which governs the protocol.
Overview
Yearn Finance was developed by Andre Cronje and operates on the Ethereum blockchain. It functions as a yield aggregator, offering a suite of products that simplify DeFi mechanisms. A key feature is "Yearn Vaults," which allow individuals, DAOs, and DeFi protocols to create various projects, such as play-to-earn (P2E) games, DAO tools, and NFT projects. Yearn Finance's native token, YFI, is central to its ecosystem.
History of Yearn Finance
Early beginnings (February 2020 - July 2020)
Yearn Finance began as iEarn, a yield arbitrage platform supporting stablecoins like TUSD, USDC, USDT, DAI, and more on DeFi platforms including Fulcrum, Compound, Curve, and Aave. One of its innovative features was integrating Zap, enabling users to swap between liquidity pools on Curve Finance. This positioned iEarn to offer efficient liquidity pools. However, challenges in yield measurement led to the development of a yield-aware automated market maker (AMM). In July 2020, iEarn rebranded to Yearn Finance to address these complexities.
| Ticker | YFI |
| Category | Decentralized Finance (DeFi) |
| Website | https://yearn.fi/ |
| @yearnfi | |
| Telegram | yearnfinance |
| https://www.reddit.com/r/yearn_finance/ | |
| Contract Addresses | |
|---|---|
| ethereum | 0x0b...3e Copied! |
| xdai | 0xbf...fdCopied! |
| optimistic-ethereum | 0x90...7bCopied! |
| near-protocol | 0b...arCopied! |
| base | 0x9e...39Copied! |
| energi | 0x27...bcCopied! |
| huobi-token | 0xb4...35Copied! |
| polygon-pos | 0xda...b6Copied! |
| fantom | 0x29...69Copied! |
| arbitrum-one | 0x82...82Copied! |
| harmony-shard-0 | 0xa0...07Copied! |
| avalanche | 0x9e...dcCopied! |
| sora | 0x00...62Copied! |
Rebranding (July 2020-to-date)
With the rebranding to Yearn Finance, the platform launched its first product, v1, focusing on Aave yield assets. Despite some challenges, it introduced yield-stablecoins and several other products, including the YFI token and various finance tools. As the yield farming landscape evolved, Yearn Finance introduced v2, which included Yearn Vaults (yVaults), Controllers, and Strategies. In August 2020, yinsure.finance was launched as a prototype for tokenized insurance. Yearn Finance continues to evolve, with v3 launched in September 2021 to enhance user experience and decentralization.
Products of Yearn Finance
Yearn Vaults (yVaults)
Yearn Vaults are a sophisticated product of Yearn Finance, providing automated yield generation for many DeFi protocols through Strategies developed by Strategists. There are three versions of yVaults: v1, v2, and v3, with v1 now deprecated. V2 vaults can employ multiple strategies, enhancing flexibility and efficiency. Yearn Vaults exist across various blockchain platforms, including Ethereum, Fantom, Arbitrum, and Optimism, each supporting multiple strategies.
Ethereum Vaults
Most yVaults operate on the Ethereum mainnet, with over 250 strategies and 100 yVaults developed on this network.
Fantom Vaults
Yearn introduced yVaults on the Fantom network, mirroring the strategy flexibility seen in Ethereum vaults.
Arbitrum Vaults
Arbitrum yVaults also support multiple strategies per vault, utilizing Ethereum-based Layer 2 (L2) solutions to enhance transaction efficiency.
Optimism Vaults
Launched in October 2022, Optimism yVaults offer similar capabilities to Ethereum yVaults, supporting a variety of farming opportunities.
Yearn CRV (yCRV)
yCRV is a system that allows users to engage with special tokens/yVaults. It includes yCRV, st-yCRV, and lp-yCRV tokens, each serving different functions, such as interacting with Curve-based offerings or providing liquidity.
Yearn ETH (yETH)
yETH tracks ether (ETH) liquid staking tokens (LSD), providing a way to manage varying risks across protocols.
Yearn Bribe (yBribe)
yBribe enables veCRV holders to earn rewards by selling votes to the highest bidders, who influence CRV reward allocations.
Yearn Token (YFI)
Yearn Finance's native cryptocurrency, YFI, is an ERC-20 utility and governance token. YFI holders can vote on community proposals, with governance decisions impacting the platform's development. The governance system allows token holders to stake their YFI to participate in decision-making and profit distribution.
Governance
Yearn Finance is governed by its community through a voting system, with YFI token holders influencing decisions. Profits from Yearn's products are shared with stakeholders who stake their tokens in governance contracts.
Protocol security
In April 2023, a security incident was detected involving the legacy iEarn protocol, leading to the unauthorized minting of Yearn Tether (yUSDT). The exploit was addressed, and Yearn Finance assured users that current contracts and protocols were unaffected.