Our dummies guide to Yearn Finance in 2022

Our dummies guide to Yearn Finance in 2022

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Chris
Chris

An editor at Coincrop


19 Apr 2022 | 6 min read
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earn Finance is a set of protocols executing on the Ethereum blockchain. The protocols make it possible for users to achieve the best earnings on their cryptocurrency assets through trading and lending services.

In this guide:

Disclaimer: All of the information written on Coincrop is without influence and based on our analysis. No guarantee is offered concerning the accuracy of this information and therefore, any individual following up on it does as such completely at their own risk. Rates are correct at time of publication.

What is Yearn Finance?

Yearn.finance (YFI) is an aggregator service for decentralized finance (DeFi) investors, using automation to allow them to maximize profits from yield farming.

Its goal is to simplify the ever-expanding DeFi space for investors who are not technically minded or who wish to interact in a less committal manner than serious traders. 

Yearn (YFI) was launched in February 2020, the service was formerly known as iEarn, has grown massively in months developers released in-house token YFI. 

Yearn Finance is a yield farming platform with a process of staking cryptocurrency to earn interest as passive income. Yearn Finance aims to optimize a yield to generate a higher return through De-Fi. The platform is as an automated tool that invests into liquidity pools of various projects to deliver the best possible profits. 

Yearn runs on the Ethereum network, its purpose is to make yield farming simple for the retail masses.

The platform is aimed to make user experience simpler to use with other DeFi projects, this service enables a user to swap and farm in one place. According to the whitepaper, the project provides three core products: Earn, Vaults, and Iron Bank.

Yearn Finance earn

This is a lending aggregator and shifts funds between different platforms. Users can deposit to these aggregators to earn interest. The smart contracts of this product ensure that users are always obtaining the highest interest rates. 

Yearn Finance vaults

These are essentially a savings accounts for crypto assets a user can manage their holdings further to this the platform offers more than ten different strategies, so a user can choose what suits them best, the platform even helps users shift capital, auto-compounding, and rebalancing.

Yearn Finance iron bank

This is the lending service for both users and the protocols, this allows borrowing using your crypto as the collateral.  Your collateral is pledged as security for the repayment of a loan.

How are tokens created?

A YFI token is not mined, however, users can earn YFI tokens by staking funds into the Balancer protocol of the project. The protocol receives a share on the trading fee from the platform. Users can then earn this trading fee as a percentage of the total funds in for the form of YFI tokens.

How many tokens are in circulation?

There is a total of 36.6K YFI tokens circulating in the market. The community decides whether more tokens can be issued or not.

What can I earn on Yearn Finance?

Deposit assetsReward assetsAPY Rate

Yearn Finance FAQs

The APY (or annual percentage yield) is a projection for how much the investor could earn if their returns were compounded and held for one year.

A vault can be thought of as similar to an actively managed mutual fund but the difference being it is executed using computer code.

YFI is the governance token that governs operations on the Yearn Finance ecosystem.

Yearn Finance works on the Ethereum blockchain.

No. Assets held in a vault can be withdrawn at any time.


Chris

Chris

An editor at Coincrop
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Chris is a Crop Crop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely assembling lego models.


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