With one of the lowest circulating supplies, YFI primed for growth as yield farming gains adoption.

Yearn.Finance on Ethereum BlockchainPixabay
Bitcoin and Crypto Market Watch Monday, January 03, 2022 - 19:19

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The rapidly expanding and evolving DeFi space poses an inherent risk for users who are not well-versed with the complexities of the DeFiverse but wish to optimize their return via various DeFi offerings, including yield farming (a way to gain additional crypto as interest). There’s a need for a service that guides the users in choosing the right lending protocol at the best interest rates via an aggregator setup. Yearn.Finance is one such aggregator protocol that seeks to simplify user incentivization through its comprehensive DeFi comparison tools. Let’s dig into the service today.

Yearn: An Introduction

Yearn.Finance is one of the leading decentralized finance projects that positions itself as a group of protocols hosted on the Ethereum blockchain. The primary objective of the protocol cluster is to help the users optimize their earnings on crypto assets via trading and lending services while removing the need for a financial intermediary like a bank or a custodian. It aims to simplify the ever-expanding expanse of the decentralized world for users with little to no technical knowledge.

The project was launched in February 2020 by the independent developer Andre Cronje. It uses only code to bring forth the DeFi utilities by building a system of automated yield farming incentives for the users around its native token - the YFI cryptocurrency. The users can earn YFI tokens by locking their crypto assets in Yearn.Finance contracts.

YFI coin: Fundamentals

YFI is the governance token of the Yearn.Finance platform. The YFI holders have the right to vote on various proposals and user rules that govern the Yearn.Finance platform. To see the light of the day, a proposal must attain a 50% majority. Also, while anyone can make a proposal, the right to vote is reserved with the YFI holders.

The YFI token supply is currently fixed at a miniscule 36,666 tokens making it one of the lowest in the crypto ecosystem, but the supply can be increased once the YFI holders elect to proceed with it. The users who lock their cryptocurrencies in Yearn.Finance and its contracts on the Balancer and Curve are rewarded with YFI tokens.

Because of its low circulating supply, the price of YFI token is currently nearly $40,000 each. Users can invest in fractions of the token as with most cryptocurrencies.

Short Term Technical Analysis

The price of the YFI token remains significantly low from its all-time-high of nearly $83,000. Going forward, YFI has to overcome the resistance at the 0.382 retracement of its dip from May 2021 to December 2021 (located at $47,455). Beyond this, it will need to contend with several other resistances at $56,600, $65,800 and $69,100.

 

Yearn chart

Source: TradingView, Binance

There is something to look forward to though. It is rising in a parallel channel formation for a month now that could take it to these important resistances while offering a rising support at the middle of the channel (currently located at $38,500). 

Future Potential

Yearn.Finance, currently a top 100 crypto, has performed exceptionally well in December, registering green candles. The aforementioned rally has the coin drawing in over $400 million worth of value. Given its current performance and the regularly added features that amp up the platform’s value, YFI holds massive future potential in the face of the upcoming decentralized web3 and DeFi protocols.  

Disclaimer: This article was authored by Giottus Cryptocurrency Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.

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