Hello everybody and welcome back in this new article of my “Easy & Short Cryptocurrencies Made Accessible” area. (INSERIRE LINK SEZIONE) Today we are going to see Yearn Finance.
Yearn Finance is a suite of products in Decentralized Finance (DeFi) that provides lending aggregation, yield generation, and insurance on the Ethereum blockchain. The protocol is maintained by various independent developers and is governed by YFI holders.
As of now, Yearn is one of the most popular and most decentralized DeFi projects in the crypto sector. While the YFI is the native cryptocurrency of Yearn Finance. Unlike Bitcoin, YFI is a governance token that boasts of the autonomous protocol.
That means users of the platform have the rights to cast a vote on the protocol’s direction that favor their intention the most. As of now, YFI is one of the largest Ethereum based tokens prioritizing automated yield farming strategies.
On August 31 2020, Yearn Finance launched the ETH vault which allows users to stake their ETH holdings for high returns via its new YETH product. The new product will likely attract a large amount of ETH tokens from the market, creating more demand for the second largest crypto.
Image source: https://yearn.finance/
How does governance work?
YFI holders govern the Yearn ecosystem and are eligble to receive a portion of protocol profits. Therefore, YFI represents a right to govern the platform and a claim on its earnings. Profits are obtained from each of Yearn's products through a governed fee structure.
To guarantee benefits, YFI holders stake their tokens into the Governance contract. Benefits are occasionally shipped off this agreement from the Yearn Treasury Vault, which incidentally holds benefits before dissemination to partners. Benefits are shipped off the Governance contract after the Treasury Vault has gathered a $500,000 save; this save is utilized to pay for different operational costs, including engineer pay and local area awards. The sum held in the Treasury contract before benefits are shipped off the Governance contract are liable to change by YFI holders. Benefits are distributed as yCRV tokens.
To decide on a proposition, YFI holders should be marked in the governance contract. Right now, clients of the YFI Vault (for example yYFI holders) are likewise qualified to cast a ballot. To lessen the burden of fees on more modest holders, Yearn governance chose to relocate to off-chain voting hosted by Snapshot. Snapshot is an off-chain gasless multi-governance customer with simple to check and difficult to challenge results. It makes making and deciding on proposals free with comparative advantages to on chain voting.
Yearn Finance is an interesting protocol that is building unique decentralized finance products. The future seems bright as they hire a team of developers and marketers, but only time will tell if the project will manage to thrive longer in the Ethereum DeFi space.
In this first article I wanted to introduce you to the world of YFI. I remind you that in this section I analyze different tokens and for each one I make a first introductory article and a second one where I explain in more detail the peculiarities of the project. If you want to know more about Yearn Finance, I invite you to follow me to stay updated on the various topics I face, and activate a reminder for next Sunday, when the second part dedicated to YFI will be released!
Have you some YFI in your crypto wallet?
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