YFI is the governance token for the Yearn Finance protocol. Its purpose is for voting and to receive cash flows from the fees earned by the protocol.
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. It started out as a passion project by Andre Cronje. He wanted to automate the process of switching capital between lending platforms in search of the best yield offered. Lending yield is a floating rate rather than fixed rate. Funds are shifted between dYdX, AAVE, and Compound automatically as interest rates change between these protocols. This led to an exponential increase in YFI price.
Stablecoin Services
The service offered includes major USD tokens such as DAI, USDT, USDC, and TUSD. If a user deposits DAI into yearn.finance, the user will receive yDAI, a yield-bearing DAI token token in return.
YFI and Curve
Later on, YFI and Curve Finance released a yield-bearing USD tokens pool that includes four y-tokens: yDAI, yUSDT, yUSDC and yTUSD, it is named as yUSD.
Vault
Yearn Finance debuted the vault feature after its token launch. It ignited a frenzy on automated yield farming and is considered the initiator of the category of yield farming aggregator. Basically, the vault will help users to claim yield farming rewards and sell it for the underlying assets.
Vaults benefit users by socializing gas costs, automating the yield generation and rebalancing process, and automatically shifting capital as opportunities arise. End users also do not need to have proficient knowledge of the underlying protocols involved or DeFi, thus the Vaults represent a passive-investing strategy. It is akin to a crypto hedge fund where the aim is to increase the amount of assets that users deposited.
Let us review YFI Price
YFI Price Prediction
YFI is currently trading just above the support of $32471. If this support breaks, we could see a move down towards $29132 and $25442. If it can stay above the support zone and consolidate, we could start seeing a move towards $37995, $41872, $45749, $51270 and $58301.
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