Of these products, Yearn Vaults are currently the only ones that Yearn monetizes - this will be the focus of our analysis. In addition to this, Yearn also offers a product called Zap, which allows users to access various lending platforms such as Compound, Curve, and Aave from a single access point. There are currently four categories of investment vehicles that have several pools within them: 1) Vaults, 2) Earn, 3) Iron Bank and 4) Experimental. On Yearn’s platform, users can deposit their idle cryptocurrency in a variety of algorithmically managed investment vehicles to earn a yield. Its products currently generate a return between 25–35% on average, which is attractive given the relatively low risk associated with most of these lending protocols. In exchange for this service, Yearn charges depositors a performance fee, as well as either a withdrawal or management fee, depending on the product in question.ĭespite being less than a year old, Yearn’s success rate has been impressive. Yearn’s selling point is twofold: 1) automated yield maximization and gas price reduction and 2) ease of use. It does this by shuffling its assets under management across various yield generating pools on platforms such as Compound, Curve, and Aave.
Yearn Finance is an Ethereum-based yield aggregation platform that helps users maximize yield from lending their cryptocurrency across various DeFi protocols. Based on the estimated present value of future Treasury cash flows, we expect the $YFI token could be worth at least 2X what it is today. Currently, $YFI tokens are basic governance tokens, however, tokens are expected to resume being dividend-yielding in the future once the platform is more mature. In the past, these proceeds have also been used to pay $YFI token holders dividends. Treasury funds are currently mandated to buyback $YFI on the open market and re-distribute it to the community to incentivize further participation. After paying costs, the remaining proceeds are deposited in Yearn’s Treasury. In exchange, Yearn charges its users a management and performance fee. Yearn makes the process of yield aggregation across DeFi platforms, such as Compound, Curve, and Aave, easier by minimizing gas fees and maximizing yield. Yearn Finance is an automated yield aggregation platform that has become a DeFi heavyweight in less than a year, after launching in July 2020.
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