Yearn Finance

 4.9/5

Yearn Finance is an aggregator service for decentralized finance (DeFi) investors. It uses automation to allow its users to maximize profits from yield farming.

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Background Information About Yearn Finance

Founded in 2020, Yearn Finance is a suite of products in Decentralized Finance (DeFi) that provides lending aggregation, yield generation, and insurance on the Ethereum blockchain. The protocol is maintained by various independent developers and is governed by YFI holders. Andre Cronje is the founder and CEO of the company.

Yearn Finance is an entirely new decentralized finance application that is intended to enable its users to obtain a high annual percentage yield (APY) from their investments. The platform offers few products, including:

1. yVaults- Similar to yVaults, they are like savings accounts for your crypto assets. It accepts your deposit, then routes it through strategies that seek out the highest yield available in DeFi.

2. Earn- It is a lending aggregator that strives to attain the highest yield for supported coins (DAI, USDC, USDT, TUSD, sUSD, or wBTC) at all times.

3. Woofy- The WOOFY token is the blue dog companion token of Yearn Finance. By using Woof technology, it allows two-way conversion between the two tokens. By doing so, it allows holders to be exposed to Yearn in a fluffier package.

How to use Yearn Finance?

At Yearn, it is extremely easy to deposit into any vault, thanks to its feature called “zap”. Here’s how you need to get started.

1. Connect your wallet

The first step of Yearn Finance is to connect your wallet using the “Connect Wallet” button available on Yearn Finance’s homepage. You can use any of the wallets that Yearn Finance supports. It includes MetaMask, Trezor, Opera, Coinbase Wallet, among others. You can select the wallet that best fits your need; however, you need to ensure that your wallet is connected to the Ethereum network.

2. Get tokens

Once you create a wallet, you have to get tokens to your wallet. If you already have the required tokens for the vault that you would like to deposit in then, follow the below steps-

i) Select the vault that you would like to deposit into.

ii) Next, enter the number of tokens you would like to deposit into the vault. If you are depositing ETH, then make sure you have sufficient ETH left over to pay for the future transactions that you may need to make.

iii) Once this is done, you need to click on the “Approve” or “Deposit” button, depending on if you have previously approved.

iv) Next, your wallet will ask you to confirm the transaction. It will take about 2-3 minutes, but you can speed it up by paying a higher gas fee to the network.

v) Upon a successful transaction, you can see your deposited balance in the vault’s interface, which will appear at the top of the vault list.

3. Withdrawing tokens

For withdrawing tokens, you need to follow the below steps-

i) First, you need to select the vault that you would like to withdraw from.

ii) Next, you have to enter the amount you want to withdraw or click on ‘Max’ to withdraw the entire balance.

iii) Click on the “Withdraw” button

iv) Your wallet will ask you to confirm the transaction. This will take about 2-3 minutes, but you can speed it up by paying a higher gas fee to the network.

v) Upon a successful transaction, the tokens will show in your wallet again.

Frequently Asked Questions About Yearn Finance

1. Is Yearn Finance secured?

Yearn Finance gives priority to user security. Hence, before enabling any vault on its primary website, it gets them tested and reviewed by industry-leading developers and auditors.

2. What are the fees to use yVault at Yearn Finance?

Yearn Finance v1 charges a withdrawal fee of 0.5% in addition to a 5% performance fee from the gas cost saved. The v2 fees structure follows the traditional hedge fund fees structure of 2/20, where it charges a 2% management fee and 20% performance fee.

3. How to make money at Yearn Finance?

To make money, you can deposit assets into their Vault or use Earn products. By doing so, you will earn a high-interest rate on the deposits. The platform also provides the use of stablecoins and other avenues to potentially make money.