It’s been a busy couple of months! You may have seen our recent announcements that we’ve launched 11 new DeFi tokens on the Wirex app*, one of these being YFI. We reached out to Yearn.finance and spoke to a member of their growth team, @0xWeaver, to get their take on the DeFi movement.
Want to know more about the YFI token? Check out the spotlight here.
Why was Yearn.finance created?
Yearn was created as a response to the way finance today excludes most people, and the way a lot of organisations run with hierarchical structures and commoditized talent.
Andre Cronje started Yearn after a year spent combing through the code of every major crypto project. A lot of the projects were inspiring which drove him to build. He donned his coveralls and became a farmer of yield, tending his crops with code, building and automating processes directly on Ethereum to earn himself optimal yield across opportunities.
Automation and aggregation have the power to dramatically expand access, and to empower groups of people to pool their funds and do more than they could as individuals. Smart contracts have the power to facilitate this in a manner where these people need not trust (or even know) each other to grow their holdings together. This transparency is an invitation for everyone to come, use these tools, improve these tools, build their own tools around them, and shape Yearn’s future together.
Yearn was created to make DeFi simple so more and more people can be a part of it and was created in a way that those who build on it need not seek out permission. Because of this, a strong community of independent doers and partners have collaborated to build a suite of products that have onboarded nearly $5B of assets to date.
How is Yearn.finance benefiting ordinary consumers?
Today we are just beginning to scratch the surface of the impact we can have on ordinary consumers, as using our products requires some level of crypto and DeFi fluency. We want to empower ordinary DeFi consumers by allowing them to bring their holdings to Yearn vaults and basically setting the funds down and forgetting about them. The combination of our strategists (people) and automation (code) come together to form an auto-compounding perpetual yield machine which optimally grows the user’s holdings. We do this in the native currency the user has deposited, meaning if you deposit USDC you earn more USDC, with auto-compounding yield.
All the farming is done behind the scenes. Some DeFi pros use us for weekends or other periods where they want to take a break, or to have us tend their stablecoins for them. Most users enjoy the benefits of strategists and automation doing the work, and the cost benefits of socializing gas costs instead of paying for this individually.
What makes YFI different from other DeFi tokens?
YFI was fairly launched, meaning nobody had preferential access to tokens over anyone else. There was no presale to VCs or whales, and no payouts to influencers. YFI was farmed by the community. While there are funds and whales today with large YFI holdings, they had to acquire YFI from the market like everyone else.
What is Yearn.finance’s biggest achievement to date?
Short answer: Reaching $4.7B TVL (Total Value Locked) and counting, growing strong through the recent market volatility.
Longer answer: The mint. Earlier this year, by community vote, we increased the supply of YFI by 6,666 to a total of 36,666. This happened in early February, when we had less than $1B TVL. Four months later we have almost $4B incremental TVL, over 30 compensated people working full time on Yearn, dozens more contributors with grants and other incentives, and a strong and growing partner and affiliate network. We’ve paid out over $560k in revenue share via our new partner programme, and are on a run rate of over $100M annualized revenue. The mint reflects the evolution of a fair launched product, the power of community governance and collaboration, and our performance since the mint shows the impact that a DAO can have.
What do you think the future of DeFi look like?
As massive as this past year has been for DeFi, much of what we’ve seen is early proofs of concept. Traditional markets have seen sketchy trading halts, centralised exchanges have buckled under high volumes. National currencies are inflating, consumer prices are rising. DAI keeps its peg through massive market fluctuations. Unprecedented liquidations rock the overall market, but DeFi infrastructure holds strong. Defi Llama shows $118B+ TVL today. Depending on who you ask, there are anywhere from a few hundred thousand to a couple million daily active DeFi users. Even at $1T TVL it will still be just a sliver compared to deposits at large banks. It sounds cliche, but we are still early.
The examples above of builders bringing legos on top of Yearn are just the beginning. Smart people continue to pour into the space, not just with their money but with their brains. We see more products being built that solve real world problems, unlock real opportunity for real people, and lean on automation and trustless architectures to make growth easy. We see a network effect when the crypto crowd can easily access products like Yearn vaults, and a snowball effect when people looking to make a change in the way they work see the tangible opportunities in DAOs and DeFi.
For Yearn we see strong continued growth with individuals and the emergence of more b2b, or really dao2dao, integrations. With easy lego integrations, transparency, and aligned incentives, there’s a massive opportunity ahead for all of us who view DeFi as a world where we all benefit from its continuous growth.
*Subject to T&Cs