The yTokens are merely representations of the provided liquidity. YTokens are another ingredient in the mix. Users deposit stablecoins and the Earn function rebalances for the highest yield. It is a yield aggregator for platforms such as Aave, Compound, or dYdX. You might already be familiar with the “Earn” function. You’ll see five different options each with a different function. To get a visual of the entire yearn.finance protocol, head over to their dashboard. And that is how today’s yearn.finance came into being. Later, he realized he could scale it and make it public. So, like any good programmer who can’t tolerate redundant activities, he began coding his Yearn protocol to automate the entire process. The manual effort was repetitive and boring. So, when Cronje started, he had to regularly check which protocol was delivering the highest return and then move his funds there. If you’re not sure what any of this means you might want to first check out these articles: Intro to DeFi and Intro to Yearn.Finance. Yearn.finance came about because a self-taught, solo developer decided to create yield optimization strategies before there was even a name for yield farming. That’s right, a team of engineers backed by millions of VC dollars didn’t create yearn.finance. How Yearn.Finance StartedĮarlier this year (2020), Cronje began looking into ways to automate his strategy to find the highest paying lending protocols. Users can just pick a desired strategy from the dashboard and start earning tokens. With yearn.finance a user can tap into the hive mind of the founder, Andre Cronje, and the community that votes on which strategies to employ. It is, therefore, no longer necessary to spend hours researching and chasing the hottest liquidity pools. It operates as an automated yield farming protocol on Ethereum that scours the DeFi ecosystem for the best returns.Īrguably the most interesting thing about yearn.finance is that it makes complex yield farming strategies available to the average crypto user. Yearn Finance, stylized as yearn.finance, is a yield aggregator that maximizes yield by strategically allocating liquidity to various DeFi protocols. In need of a refresher on Yearn Finance? The Ivan on Tech Academy blog has an extensive guide to Yearn Finance, and if you are looking to learn more, countless Ivan on Tech Academy courses are just a click away! Choose between loads of cryptocurrency and blockchain courses and supercharge your blockchain education! What is the Yearn.Finance Protocol? However, before we jump into the specifics of Yearn Vaults, let’s do a quick rundown of the yearn.finance protocol and see exactly what it does. Keeping this in mind, Yearn Vaults mainly appeal to risk-tolerant traders. Specifically, Yearn Vaults are pools of funds following certain strategies, which attempt to provide passive income streams through competitive yield farming strategies. Yearn Vaults are the brainchild of Yearn Finance, and comes as a response to the recent yield farming and liquidity mining trends. Yearn Vaults (stylized as yEarn Vaults) are one of the more exciting things happening in the decentralized finance (DeFi) space right now.
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