Decided yearn.finance is a good investment? You can get YFI on Coinbase, FTX and Gemini today.
A huge benefit of cryptocurrency is that users can stake their tokens for huge rewards. Interest rates on crypto are often much higher than the risk-free rate, and users can generate steady income streams from this unique feature. Yearn.finance (YFI) hopes to bring staking and yield farming to the common investor and give everyone the opportunity to earn big.
What is yearn.finance (YFI)?
Staking and yield farming in crypto are a way for users to lend out their investment to receive a reward. While the system itself is similar to that of a savings account in a bank, the decentralized aspect of the program allows users to generate much higher returns.
The staking and yield farming process can often be confusing as there are thousands of tokens to stake with and it can be difficult to find the best rates. yearn.finance is a unique project that hopes to bring this decentralized finance (DeFi) feature to the average investor.
To generate the best rate for its users, yearn.finance combines several projects, such as Aave, Curve and Compound. This procedure also serves as a hedge, as investors do not have to put all of their investment into a single token.
YFI is the governance token that powers the project. It is an ERC-20 token, meaning it is built on the Ethereum blockchain. It can harness the power of Ethereum while having the ability to make unique changes to the protocol.
YFI gives holders voting rights, which they can use to have a say in where the project goes in the future. A major issue that users can vote on is fees. yearn.finance currently charges a 0.5% withdrawal fee and a 5% gas fee. However, users can vote on these fees using their YFI holdings. It is worth noting that the developers hold a large stake in the token, so decisions are not made entirely by the community.
Right now, 100% of the YFI supply has been minted. No new tokens can be created without a vote from YFI holders. However, numerous proposals to mint new tokens have emerged, and a few of these have passed. While all current tokens are in circulation, new tokens could be minted at any time.
yearn.finance (YFI) Price History
YFI is currently trading for around $30,000, with a market capitalization of just over $1 billion. It ranks in the top 100 cryptocurrencies in terms of market cap.
In 2021, it saw lows of under $20,000 and highs of nearly $100,000. It is currently down nearly 70% from its all-time high.
yearn.finance (YFI) Competition
The main competitors to yearn.finance are other platforms that generate the best staking rates. Perhaps the largest competitor is Harvest Finance (FARM). This project is similar to YFI with a few distinct differences.
FARM offers a few tokens with much higher interest rates than YFI. However, these tokens have much less invested in them. For example, FARM offers a FARM/CRV staking pool that can generate over 100% APY, but it has a total deposit of less than $100,000. Conversely, yearn.finance’s largest APY is just over 50% APY, but there is nearly $15 million deposited. While FARM may offer higher rates, YFI offers much more liquidity and stability.
FARM also offers a lot more tokens to stake. However, these often have far less deposited than YFI making them riskier to stake, as there is less collateral.
Overall, FARM may provide higher rates but has higher risk because of its small size. YFI provides lower rates but offers the protection of large amounts of capital and a strong community.
How to Buy yearn.finance (YFI)
If you are looking to purchase yearn.finance (YFI), it is fairly easy to do. It is supported by a variety of prominent trading platforms and is readily available for purchase. Some of the best exchanges that support YFI are Coinbase Global Inc. (NASDAQ: COIN), FTX and Gemini.
Opening an account on any of these platforms is simple, and you can typically begin trading within 24 hours.
Coinbase is one of the Internet’s largest cryptocurrency trading platforms. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes it exceptionally simple to buy and sell major cryptocurrency pairs.
You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and enhanced functionality.
Though Coinbase doesn’t offer the most affordable pricing or the lowest fees, its simple platform is easy enough for complete beginners to master in as little as a single trade.
Best For
- New cryptocurrency traders
- Cryptocurrency traders interested in major pairs
- Cryptocurrency traders interested in a simple platform
- Simple platform is easy to operate
- Comprehensive mobile app mirrors desktop functionality
- Coinbase Earn feature rewards you with crypto for learning about available coins
- Higher fees than competitors
Gemini is a cryptocurrency exchange and custodian that offers investors access to 26 coins and tokens. Founded in the US, Gemini is expanding globally, in particular into Europe and Asia. Offerings include both major cryptocurrency projects like Bitcoin and Ethereum, and smaller altcoins like Orchid and 0x.
Gemini is 1 of the only brokers with multiple platform options based on skill level. New investors will love the streamlined interface of Gemini’s mobile and web apps, while advanced investors might appreciate all the tools that come with ActiveTrader.
In addition to a host of platform choices, Gemini users also have access to insured hot wallets to store tokens without worrying about digital asset theft. Learn more about what Gemini can do for you in our review.
Best For
- New investors looking for a simple mobile and web app
- Experienced investors who need a more advanced platform with more tools
- Users looking for a 1-stop-shop to buy, sell and store all of their coins
- Easy and quick signups — can get started in as little as a few minutes
- Multitude of platforms to accommodate traders of all skill levels
- Hot wallets include insurance to protect your from theft and hacking attempts
- Charges both a commission and a convenience fee for users buying and selling through the desktop or mobile app
Best Hardware Wallet for yearn.finance (YFI)
While a trading platform is the easiest place to store crypto, a hardware wallet is often seen as the safest way to store crypto. Hardware wallets store private keys on a physical device. Without these private keys, crypto cannot be sent.
Best Hardware Wallet: Ledger
Ledger is a leading hardware wallet brand. It is known globally for its safe, simple and easy-to-use hardware wallets. The wallets support the buying, sending and receiving of YFI.
Ledger currently offers Nano S and Nano X models. The Nano S has the basic safety features needed to store crypto, while the Nano X supports ease of use, with features such as bluetooth connectivity and a larger screen.
Bonus Section:
Keep an eye on the interest rates that YFI provides. The interest payouts are the main use for the token and can influence the price.
Cryptocurrency Market Outlook
After a volatile November 2021, crypto markets seem to be slowing down during the holiday season. A quiet end to 2021 may be a signal of a slow 2022 or the calm before the storm.
Either way, the first few months of 2022 will be very important for the future of crypto.
Is yearn.finance (YFI) a Good Investment?
YFI is a powerful tool that can attract new users to crypto and generate solid returns for its users. However, you want to make sure you understand the risks involved. If new users stop using crypto, then YFI may struggle to gain users. Additionally, if YFI holders vote to either lower fees or mint new tokens, the price could go down as the project would be less profitable and each token would be worth less. If you are willing to take on the risks of YFI, it may be a good investment.