13 January 2021| ZebPay Trade-Desk
Yearn.finance 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. Launched in February 2020, the service, formerly known as iEarn, has seen huge growth in recent months as new products debuted and developers released in-house token YFI.
YFI is a governance token, like a company’s shares with voting rights. Governance tokens like YFI are a crucial component in making DeFi truly decentralized, since decision-making power is now spread across many hands. Since its launch, it has since rallied from ~$3 to ~$29,000 at the time of writing.
YFI Snapshot (at the time of writing):
| Market Capitalization | $883,607,416.79 |
| Current Price | $29,733.40 |
| 24 HR Volume | $642,328,689.44 |
| All Time High/Low | $43,873.82 / $739.44 |
| Script in Circulation | 29,969 YFI |
| Total Supply | 30,000 YFI |
(YFI) – Still in Early Development:
Yearn.finance set out to simplify DeFi investment and activities such as yield farming for the broader investor sector. The platform makes use of various bespoke tools to act as an aggregator for DeFi protocols such as Curve, Compound and Aave, bringing those who stake cryptocurrency the highest possible yield. New features continue to be rolled out, these aiming, among other things, to help preserve the long-term value of the platform. Yearn.finance makes a profit by charging withdrawal fees, currently 0.5% at the end of September 2020, as well as 5% gas subsidization fees. Due to its governance model, these can technically be changed by consensus at any time.
The target market for yearn.finance is investors who do not have the time to study the increasingly complex DeFi phenomenon from scratch, or who wish to optimize their returns.
Yearn.finance users can face a high risk of losing money thanks to market conditions changing rapidly and opportunistic entities attempting to profit from less-experienced participants.
Cronje, the founder of this token, himself has sought to maintain transparency about the platform’s provenance, noting that even after code audits, yearn.finance could not be guaranteed to be 100% safe — as DeFi involves inherent risk.
Investment Analysis:
Since the YFI launch in July 2020, the token has traded in a wide range, after opening at $ 906.71, the price it hit was $4319.53 appreciating more than 300% within its first month of launch. The lowest price it has witnessed is $739.44, which was below its ICO price.
YFI has generated a significant amount of interest in the space and has become the leader of decentralized finance ranking soon after it’s launch.
On the price action front, YFI has traded bullishly recently and continues to trend upwards. The volatility of the asset has shown although high when compared to traditional assets, is actually comparable when compared to the initial phase of other coins, making it a tradable asset in the short term as well.
We look at how the ROI on a MoM basis looks for YFI, proving once again how attainable and attractive the asset looks.
| 2020-Jul | 2020-Aug | 2020-Sept | 2020-Oct | 2020-Nov | 2020-Dec | 2021-Jan | |
| Avg. Price ($) | 3,030.86 | 10,772.55 | 29,692.30 | 15,296.74 | 20,145.09 | 25,394.46 | 27,944.27 |
| MoM Returns | 234.27% | 255.43% | 175.63% | -48.48% | 31.70% | 26.06% | 10.04% |
As seen in the table above, YFI shot to fame with its incredible returns from launch. The token held its momentum, before taking a tumble, and hence proving it’s volatility. However, since recovery the asset has been growing sustainably, and is showing promising signs of maturity in the crypto space.
This makes YFI an interesting offering in space as it specializes in being different in the sense that it’s programmable and has a good governance mechanism. YFI has a chance to become one of the most prominent players in the money market. The ability to participate in the governance of it may, therefore, be very valuable. Although a very nascent token, YFI does seem to have potential and grow as it develops in the marketplace over time.
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Disclaimer : This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum etc.are very speculative and are subject to market risks. The analysis by Author is for informational purposes only and should not be treated as investment advice.
