Buy YFI (Yearn Finance)
Bitcoin, Ripple and Ethereum are just a few of the known names of cryptocurrencies. Cryptocurrencies are digital assets created for the purpose of exchange through a secure cryptographic process. Unlike other currencies, cryptocurrencies are not centralised, meaning that they are not controlled by a central entity such as the government or a bank.
This year, cryptocurrencies and blockchain projects are reaching new heights in growth and value. Yearn Finance, better known as YFI or Yearn. YFI is one of the ERC-20 tokens showing massive price growth. However, despite its phenomenal performance in its projects and vision, it remains relatively unknown.
So, if you are looking for an answer to the question "What is YFI and why should you buy YFI, this article is what you need to fully understand its concept and the processes involved in Yearn Yearn.
How to buy YFI cryptocurrency
Where to buy Yearn Finance?
So, are you ready to dive into the world of cryptocurrencies and wondering where to buy YFI in South Africa? We can recommend you choose the most reliable and safe exchanges. We can advise you to purchase cryptocurrency from exchanges:
3. Huobi Global.
How do I buy Yearn Finance?
- Create a free account.
Accounts are your secure portal into the world of cryptocurrency. Creating an account is usually completely free and takes a few minutes.
- Complete your account verification.
Before you buy Yearn Finance, you'll need to verify your account. To comply with regulatory requirements (and to ensure the increased security of your account), you will need to provide a document to verify your identity.
- Buy Yearn Finance (YFI).
Once you have completed the above two steps, you will see that nothing is too much trouble! So, get ready to enter the new digital economy with your very first YFI purchase!
How to store cryptocurrency
You can hold this cryptocurrency in most of the well-known wallets. For instance, Exodus, Atomic Wallet, Coinomi are all suitable.
What is Yearn Finance?
Yearn Finance is an open-source, decentralised finance (DeFi) lending protocol based on the Ethereum blockchain. It operates as a pooled yield platform to maximise users' investment by automatically moving their funds between DeFi lending protocols such as Compound, Dydx, Curve or Aave.
Yearn is currently one of DeFi's most popular decentralised crypto projects. YFI is Yearn Finance's native cryptocurrency. Unlike bitcoin, YFI is a management token that boasts a standalone protocol.
That means that platform users have the right to vote on the direction of the protocol that best suits their intentions. For example, YFI is currently one of the most significant Ethereum-based tokens that prioritise yield farming.
History of Yearn Finance
Andre Cronje is the founder of the popular DeFi Yearn protocol. Although this protocol was only launched in July 2020, it has already achieved considerable love in the crypto community. In early September, the platform's native token, the YFI coin, even reached a peak value of around $44,000.
The platform's original goal came from Cronje managing money for friends and family. He was looking for a way to do stablecoins work for a profit. The most popular protocols were Aave, Fulcrum, Compound and dYdX. Cronje manually tested these protocols to see which offered the best annual percentage return (APR).
To avoid manually moving tokens and paying for gas all the time, he coded some smart contracts that would do the calculations for him. He then wrote iterations for the yToken. These yToken could calculate the average APR and move to wherever offered the best yield.
That subsequently became the basis of YFI, which Andre initially used himself, and only opened it up to others over time. The increase in the number of users positively affected the protocol. All because every time a user did something, the smart contracts checked to see if rebalancing was required. A higher frequency of interactions led to more shifts between protocols. And the more shifts, the higher the payoff.
Yearn is now collectively yielding better returns than either of its sources individually. The concept is relatively simple - the protocol sends a large amount of capital to the place with the highest return.
How does Yearn Finance work?
Probably one of the fundamental questions for those looking to buy YFI is how Yearn Finance works.
Yearn Finance is designed to autonomously move user funds to the most profitable projects, finding the protocol offering the best annual percentage return (APR). It is considered a revolutionary breakthrough in DeFi because of its potentially high yields parallel with stablecoins.
Yearn Finance can be considered a decentralised credit platform that allows users to deposit ERC-20 stablecoins such as DAI, USDC, USDT, TUSD or SUSD into the protocol. In exchange, users receive an equivalent amount of yToken.
Thus, technically, the YFI coin is no different from any other ERC-20 token. But instead of crediting deposited stablecoins to any particular protocol, the Yearn Finance platform automatically switches tokens to the protocol with the highest yield to maximise the user's profit.
If you compare YFI and other tokens, it has the best automation and flexibility, something never before seen in the blockchain. It will make those who want to invest in YFI happy. And do you know what the best part is? The network only charges a small fee deposited into the platform pool, then distributed to YFI token holders as a dividend. So if you are planning to buy Yearn Finance, these perks may motivate the willing.
How does a YFI token work?
Naturally, anyone wishing to buy a YFI takes an in-depth look at all aspects concerning cryptocurrency. YFI is the native token of the Yearn Finance platform. In simple terms, it is a management token that allows users to vote on decisions that affect Yearn.
YFI management token.
YFI is an ERC20 token used for all management actions on the platform, such as voting on protocol updates/changes.
To participate in the protocol, users must:
- First, they secure their YFI in a management contract;
- Then, the users get the right to vote;
- Users also get a percentage of the protocol fee for each of Yearn's products at regular intervals.
To collect the reward, users must vote, and once they vote, their YFI tokens will be locked for three days, meaning they cannot undo the asset staking.
Yearn Finance functions and tools
You need to know many Yearn Finance features to understand what you get out of when you decide to buy YFI in South Africa.
As stated, YFI aims to find the highest or best interest rates for assets lent to the protocol. Therefore, individuals can manually deposit funds such as USDT, sUSD, USDC, DAI etc.
The network works with stable coins such as Tether (USDT) and True USD (TUSD). Yearn's job is to determine which platforms (DyDx, Aave or Compound) offer the best rates in terms of returns. Then deliver the Stablecoin to that platform.
Note that all coins deposited on the network are optimised for liquidity extraction by replacing them with Y-tokens. For example, if USDT is deposited, the system converts it to yUSDT*. However, the deposited coin is delivered to a supported platform, such as Compound, in its original form.
*Yearn Finance project’s products name.
To deposit means to transfer money, securities etc., to a depository as a deposit.
The interest rates for each asset can vary, and yields will be generated as a result.
How you can make money from Yearn Finance?
So while you are planning to invest in YFI in South Africa, Yearn Finance project suggest you various ways to invest in YFI and earn.
Some of the earning opportunities at Yearn Finance:
- ytrade* Finance.
This is one of Yearn's features that makes shorting cryptocurrencies easy. You can choose to short or go long on stable coins with 1000x leverage. Shorting cryptocurrencies means selling a cryptocurrency to repurchase it when the price falls.
- yliquidate* Finance.
This feature supports flash loans on the Aave money market. Flash loans help users secure funds faster and more efficiently when they need them. These loan transactions occur without collateral as they are expected to be repaid in the same transaction block.
- yswap* Finance.
Many DeFi enthusiasts love that they can exchange cryptocurrencies without any hassle. With this feature, Yearn Finance creates a platform where users can deposit their funds and exchange them from one protocol to another.
*Yearn Finance project’s products name.
DeFi platforms have evolved into a vast financial ecosystem in a short time. DeFi's most sought-after protocols include Uniswap (UNI), Maker (MKR) and Chainlink (LINK), which have quickly become some of the giant tokens in the cryptocurrency market. Now YFI has joined them as well.
Yearn Finance allows users to generate returns that are much higher than with traditional funding methods, such as a bank savings account. Learn how to make money using knowledge and intelligence. "At the heart of any success is 99 percent labour and 1 percent talent. Labour is impossible without discipline." Happy trading!