DeFi Deep Dive: Yearn Finance, Cronje’s Diamond in the Rough

As part of BeInCrypto’s decentralized finance (DeFi) deep dive series, we’ll take a look at one of the space’s first-movers: Andre Cronje’s Yearn Finance (YFI).

The cryptocurrency and decentralized ledger technology (DLT) space is heating up right now, both in terms of value and development.

The market’s total market capitalization reached $1.7 trillion, last month. Bitcoin (BTC) alone hit $1 trillion market cap. Moreover, the number of cryptocurrency projects now sits at 8,697 according, to data from CoinMarketCap.

Furthermore, a recent analysis by The Block Research revealed that the DeFi space was the market’s fastest-growing area. This is after the Total Value Locked (TVL) in the space tripled this year.

Indeed, the DeFi space’s surge in popularity stems from the impressive development in the space, led in part by Andre Cronje’s Yearn Finance. The committed DeFi developer was also named by DeFi Prime as DeFi Person of the Year 2020.

In this article, BeInCrypto takes a deep dive into Cronje’s flagship project, Yearn Finance. We examine its pioneering fair release launch, delve into its infamous Vaults, and explore the now meme-ified “test in prod” approach to development.

We also have a look at what might be in-store for YFI and the wider DeFi space.

A fair release

Launched on July 17, 2020, YFI was a key proponent of last year’s “Summer of DeFi.” Its platform, developed on the Ethereum (ETH) network, was Cronje’s answer to the loosely tied world of DeFi staking.

At the time, exploring and researching the plethora of staking pools in the space took considerable time and resources. This rendered the space inaccessible for crypto-newcomers.

Cronje’s idea was to make Yearn a hub for all pools in the space, meaning yield farmers, as they’re called, only had to be in one place. Whilst not a completely new idea, Yearn also had an extra trick up its sleeve: the fair release model.

YFI had a maximum supply of just 30,000 tokens. Unlike many other platform native tokens, including BTC, YFI made all of these tokens available at the beginning.

However, the really unique thing with YFI, was that everybody, including Cronje, the other developers, and eager Yearn participants, had an equal chance of receiving a portion. The developers reserved no tokens for themselves.

Indeed, this instantly gave the platform star popularity, with the DeFi community dubbing the approach “The Fair Release Model.” The maximum supply has since expanded to 36,666 tokens, following a community vote to reward developers.

Summer heights

But of course, the initial release and still relatively small supply only did wonders for YFI’s price.

YFI/USDT (Binance) TradingView – Pi

Initially valued at just under $30, in less than two months, YFI soared to a value of $40,000 per token. This put its market capitalization at over $1.3 billion.

Fast forward six months, YFI ranks 58th out of the 8,697 cryptocurrencies, according to its market capitalization. Moreover, the platform currently has just under $310 million in TVL, giving it the 18th spot in the DeFi space, at the time of writing.

Sure, the fair release model is novel with admirable intention and justifiably the cause for the platform’s popularity. But what about the platform itself?

Into the Vaults

Yearn’s platform consists of several elements. The first is an Annual Percentage Yield (APY) table which shows the yearly interest rates available via staking in a number of lending pools across the DeFi space.

Yearn orders this table by APY size in a product called Earn, allowing users to quickly and easily see the best rates. But the platform’s flagship products are the Vaults.

Yearn Vaults are a collection of investment strategies which aim to extract the highest level of income over all of the lending pools linked to the platform. They work by automatically selecting the top Earn pools or via a custom strategy, and investing their users’ funds.

Essentially, the Vaults automate the yield-farming process. Indeed, the products really do simplify the DeFi earning process, reducing the learning curve which historically acted as a barrier to entry.

Accordingly, this is the principal reason why the platform is so popular. In fact, Yearn recently included in an upgrade another product called Zap, which bundles all of the above into just one click.

Whilst the terminology often associated with both Yearn and DeFi might seem complex at times, Yearn has really excelled at the simplification process.

However, despite the enormous achievements in development over the past nine months, Yearn — as is often emphasized by Cronje himself — is still an experiment.

Test in prod

This can be seen in Cronje’s infamous “I test in prod” quote. Essentially, the determined developer is exclaiming that the development of Yearn, and the existing platform are both experiments.

He makes this crystal clear on Twitter stating, “When I build software, I build it for myself. If you do insist on interacting with it, please use caution, there will be bugs.”

This, however, escapes some of the platform’s “investors,” or as he calls them “apes,” who are quick to hurl abuse at the developer following exploits or the discovery of bugs.

Indeed, Cronje recently wrote about his experiences in a Medium piece, which also prompted the aforementioned supply inflation to reward Yearn’s developers.

Whilst these “investors” are likely only in it for the money, it could be argued that testing in production dangerously exposes unwitting crypto-users to risk.

Just last month, a hacker exploited one of Yearn’s vaults for $11 million, with the hacker walking away with $2.8 million. Several other DeFi platforms following Cronje’s approach also saw exploits.

These included SushiSwap (SUSHI), Alpha Finance Labs (ALPHA), and CREAM Finance (CREAM). However, the test of a good experiment, is not perfection in experimentation, but how it adapts to new information.

All of the above-mentioned projects came back from those attacks, and still carry on today.

The future of finance

In fact, Cronje is praised not only for Yearn but for his aid in investigating all of the above exploits mentioned. To that end, popular DeFi-focused publication, DeFi Prime, named Cronje DeFi Person of the Year in 2020.

Moreover, not only do the exploit patches make these platforms stronger, but Cronje and Yearn are both encouraging a new DeFi sub-sector: platform insurance.

For this, Cronje and Yearn Finance will likely continue to lead the DeFi space, both through technological development and the development of new ideas.

In the truest form, Yearn Finance could be the future of finance, just as French oligarch DeFiGod is the “Futur of France.”

Disclaimer


All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

Leave a Reply

Your email address will not be published. Required fields are marked *

bitcoin
Bitcoin (BTC) $ 35,994.00 3.56%
ethereum
Ethereum (ETH) $ 2,429.74 0.76%
tether
Tether (USDT) $ 1.01 0.28%
polkadot
Polkadot (DOT) $ 21.05 2.53%
cardano
Cardano (ADA) $ 1.49 1.11%
binance-coin
Binance Coin (BNB) $ 348.70 2.07%
xrp
XRP (XRP) $ 0.843112 1.18%
litecoin
Litecoin (LTC) $ 163.87 0.63%
chainlink
Chainlink (LINK) $ 22.22 0.69%
bitcoin-cash
Bitcoin Cash (BCH) $ 586.84 0.11%
stellar
Stellar (XLM) $ 0.338625 3.78%
usd-coin
USD Coin (USDC) $ 1.00 0.38%
dogecoin
Dogecoin (DOGE) $ 0.318150 0.43%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 36,094.00 3.02%
uniswap
Uniswap (UNI) $ 21.82 2.34%
aave
Aave (AAVE) $ 287.68 1.77%
cosmos
Cosmos (ATOM) $ 12.01 1.73%
monero
Monero (XMR) $ 250.16 1.11%
eos
EOS (EOS) $ 4.89 3.76%
bitcoin-sv
Bitcoin SV (BSV) $ 162.00 2.06%
tron
TRON (TRX) $ 0.069149 2.56%
nem
NEM (XEM) $ 0.160807 5.07%
iota
IOTA (MIOTA) $ 1.02 5.16%
vechain
VeChain (VET) $ 0.107627 1.53%
tezos
Tezos (XTZ) $ 3.20 1.24%
theta-token
Theta Network (THETA) $ 7.81 4.71%
havven
Synthetix Network Token (SNX) $ 8.60 4.01%
avalanche-2
Avalanche (AVAX) $ 13.52 2.62%
neo
NEO (NEO) $ 46.99 4.32%
terra-luna
Terra (LUNA) $ 5.79 1.22%
dash
Dash (DASH) $ 164.59 3.33%
huobi-token
Huobi Token (HT) $ 13.29 3.88%
okb
OKB (OKB) $ 13.29 5.26%
elrond-erd-2
Elrond (EGLD) $ 80.34 4.31%
crypto-com-chain
Crypto.com Coin (CRO) $ 0.114232 4.04%
the-graph
The Graph (GRT) $ 0.612204 2.77%
compound-ether
cETH (CETH) $ 48.62 0.37%
solana
Solana (SOL) $ 36.88 1.56%
maker
Maker (MKR) $ 3,013.03 0.51%
filecoin
Filecoin (FIL) $ 70.91 2.35%
cdai
cDAI (CDAI) $ 0.021594 0.29%
dai
Dai (DAI) $ 1.01 0.17%
ftx-token
FTX Token (FTT) $ 31.19 2.63%
celsius-degree-token
Celsius Network (CEL) $ 6.98 0.44%
sushi
Sushi (SUSHI) $ 8.36 4.28%
kusama
Kusama (KSM) $ 407.29 6.25%
compound-governance-token
Compound (COMP) $ 304.74 3.05%
zcash
Zcash (ZEC) $ 128.00 0.79%
ethereum-classic
Ethereum Classic (ETC) $ 56.52 1.61%
decred
Decred (DCR) $ 132.53 5.51%
binance-usd
Binance USD (BUSD) $ 1.00 0.36%
compound-usd-coin
cUSDC (CUSDC) $ 0.022146 0.31%
zilliqa
Zilliqa (ZIL) $ 0.100704 6.49%
uma
UMA (UMA) $ 11.60 0.02%
yearn-finance
yearn.finance (YFI) $ 37,077.00 0.08%
leo-token
LEO Token (LEO) $ 2.42 0.03%
pancakeswap-token
PancakeSwap (CAKE) $ 16.01 4.25%
waves
Waves (WAVES) $ 14.80 1.13%
near
Near (NEAR) $ 2.92 7.59%
amp-token
Amp (AMP) $ 0.059193 12.64%
0x
0x (ZRX) $ 0.880431 0.53%
huobi-btc
Huobi BTC (HBTC) $ 36,142.00 3.43%
algorand
Algorand (ALGO) $ 0.995875 4.37%
digibyte
DigiByte (DGB) $ 0.055652 5.94%
icon
ICON (ICX) $ 0.902783 1.84%
hedera-hashgraph
Hedera Hashgraph (HBAR) $ 0.191681 5.97%
nexo
NEXO (NEXO) $ 1.94 2.29%
xsushi
xSUSHI (XSUSHI) $ 9.78 3.92%
ethos
Voyager Token (VGX) $ 2.26 4.59%
loopring
Loopring (LRC) $ 0.296782 2.91%
thorchain
THORChain (RUNE) $ 7.33 2.54%
ontology
Ontology (ONT) $ 0.905026 5.98%
renbtc
renBTC (RENBTC) $ 35,947.00 3.91%
nano
Nano (NANO) $ 6.26 2.82%
basic-attention-token
Basic Attention Token (BAT) $ 0.633435 6.26%
omisego
OMG Network (OMG) $ 4.76 3.53%
republic-protocol
REN (REN) $ 0.414544 5.46%
zencash
Horizen (ZEN) $ 81.51 0.16%
bittorrent-2
BitTorrent (BTT) $ 0.003440 3.37%
swissborg
SwissBorg (CHSB) $ 0.652940 5.83%
ravencoin
Ravencoin (RVN) $ 0.071170 7.76%
iostoken
IOST (IOST) $ 0.027104 5.97%
qtum
Qtum (QTUM) $ 8.68 6.67%
paxos-standard
Paxos Standard (PAX) $ 1.00 0.25%
venus
Venus (XVS) $ 23.01 3.59%
blockstack
Stacks (STX) $ 0.862818 4.81%
matic-network
Polygon (MATIC) $ 1.37 4.58%
curve-dao-token
Curve DAO Token (CRV) $ 2.13 3.90%
siacoin
Siacoin (SC) $ 0.015293 3.39%
quant-network
Quant (QNT) $ 52.46 3.91%
bancor
Bancor Network Token (BNT) $ 3.84 1.29%
reserve-rights-token
Reserve Rights Token (RSR) $ 0.027841 6.95%
fantom
Fantom (FTM) $ 0.247153 6.81%
mdex
Mdex (MDX) $ 1.96 3.41%
enjincoin
Enjin Coin (ENJ) $ 1.26 7.32%
energy-web-token
Energy Web Token (EWT) $ 7.65 2.32%
lisk
Lisk (LSK) $ 2.81 5.28%
ampleforth
Ampleforth (AMPL) $ 0.840606 2.45%
balancer
Balancer (BAL) $ 23.12 2.09%
terrausd
TerraUSD (UST) $ 1.00 0.03%
ocean-protocol
Ocean Protocol (OCEAN) $ 0.489034 5.48%
husd
HUSD (HUSD) $ 1.00 0.58%
nxm
Nexus Mutual (NXM) $ 93.09 1.13%
1inch
1inch (1INCH) $ 2.72 4.35%
bitcoin-gold
Bitcoin Gold (BTG) $ 58.22 3.59%
kyber-network
Kyber Network Crystal Legacy (KNCL) $ 1.72 3.04%
verge
Verge (XVG) $ 0.026804 3.57%
decentraland
Decentraland (MANA) $ 0.677122 5.99%
alpha-finance
Alpha Finance (ALPHA) $ 0.598600 3.06%
flow
Flow (FLOW) $ 11.95 7.53%
band-protocol
Band Protocol (BAND) $ 6.65 2.14%
status
Status (SNT) $ 0.071042 10.08%
dodo
DODO (DODO) $ 1.29 3.01%
bitcoin-cash-abc-2
Bitcoin Cash ABC (BCHA) $ 20.33 3.70%
compound-usdt
cUSDT (CUSDT) $ 0.021299 0.35%
xdce-crowd-sale
XDC Network (XDC) $ 0.050382 4.80%
staked-ether
Lido Staked Ether (STETH) $ 2,429.17 0.98%
arweave
Arweave (AR) $ 14.97 7.21%
polymath-network
Polymath Network (POLY) $ 0.205738 6.95%
safepal
SafePal (SFP) $ 0.952683 6.06%
true-usd
TrueUSD (TUSD) $ 1.00 0.26%
zkswap
ZKSwap (ZKS) $ 0.657955 4.82%
polkastarter
Polkastarter (POLS) $ 1.33 6.31%
ethlend
Aave [OLD] (LEND) $ 2.84 4.19%
helium
Helium (HNT) $ 12.66 4.70%
civic
Civic (CVC) $ 0.259877 4.13%
pundi-x
Pundi X [OLD] (NPXS) $ 0.001214 1.91%
kava
Kava.io (KAVA) $ 3.67 1.84%
golem
Golem (GLM) $ 0.263379 7.33%
harmony
Harmony (ONE) $ 0.078016 2.79%
nucypher
NuCypher (NU) $ 0.297941 4.17%
holotoken
Holo (HOT) $ 0.007494 2.71%
nusd
sUSD (SUSD) $ 1.01 0.47%
electroneum
Electroneum (ETN) $ 0.007691 13.03%
nervos-network
Nervos Network (CKB) $ 0.018547 3.16%
derivadao
DerivaDAO (DDX) $ 2.42 6.45%
district0x
district0x (DNT) $ 0.144946 5.08%
bitcoin-diamond
Bitcoin Diamond (BCD) $ 2.90 5.76%
trust-wallet-token
Trust Wallet Token (TWT) $ 0.357296 0.36%
rif-token
RSK Infrastructure Framework (RIF) $ 0.179252 3.09%
swipe
Swipe (SXP) $ 1.73 3.68%
gnosis
Gnosis (GNO) $ 172.57 0.46%
numeraire
Numeraire (NMR) $ 39.65 3.26%
rook
KeeperDAO (ROOK) $ 148.57 3.44%
kucoin-shares
KuCoin Token (KCS) $ 8.09 0.89%
btc-standard-hashrate-token
BTC Standard Hashrate Token (BTCST) $ 27.13 4.28%
aragon
Aragon (ANT) $ 4.39 0.70%
fetch-ai
Fetch.ai (FET) $ 0.260716 6.50%
litentry
Litentry (LIT) $ 3.21 5.41%
funfair
FUNToken (FUN) $ 0.020371 6.10%
chiliz
Chiliz (CHZ) $ 0.284266 14.32%
seth
sETH (SETH) $ 2,440.35 0.04%
oasis-network
Oasis Network (ROSE) $ 0.067173 7.80%
injective-protocol
Injective Protocol (INJ) $ 7.86 3.31%
vethor-token
VeThor Token (VTHO) $ 0.007752 3.56%
saffron-finance
saffron.finance (SFI) $ 416.16 0.10%
augur
Augur (REP) $ 18.81 5.89%
the-sandbox
The Sandbox (SAND) $ 0.270416 14.07%
singularitynet
SingularityNET (AGIX) $ 0.186158 4.51%
secret
Secret (SCRT) $ 1.33 2.84%
telcoin
Telcoin (TEL) $ 0.029146 3.26%
serum
Serum (SRM) $ 3.77 5.64%
gatechain-token
GateToken (GT) $ 3.87 4.35%
mainframe
Hifi Finance (MFT) $ 0.008869 6.47%
sbtc
sBTC (SBTC) $ 36,243.00 3.83%
compound-uniswap
cUNI (CUNI) $ 0.440985 2.30%
ardor
Ardor (ARDR) $ 0.170678 10.21%
vai
Vai (VAI) $ 0.893215 0.71%
utrust
UTRUST (UTK) $ 0.314908 5.80%
prometeus
Prometeus (PROM) $ 14.74 23.27%
reddcoin
Reddcoin (RDD) $ 0.002883 21.25%
monacoin
MonaCoin (MONA) $ 1.83 2.50%
noia-network
Syntropy (NOIA) $ 0.195961 2.28%
compound-0x
c0x (CZRX) $ 0.018081 1.28%
wink
WINkLink (WIN) $ 0.000432 4.52%
ankr
Ankr (ANKR) $ 0.085412 0.58%
bytom
Bytom (BTM) $ 0.074862 2.18%
rocket-pool
Rocket Pool (RPL) $ 11.77 3.26%
origintrail
OriginTrail (TRAC) $ 0.321056 0.52%
steem
Steem (STEEM) $ 0.407241 11.78%
maidsafecoin
MaidSafeCoin (MAID) $ 0.690440 2.93%
tomochain
TomoChain (TOMO) $ 1.48 2.09%
edgeware
Edgeware (EDG) $ 0.009513 0.37%
skale
SKALE (SKL) $ 0.286332 5.96%
stratis
Stratis (STRAX) $ 1.26 6.89%
hegic
Hegic (HEGIC) $ 0.106046 3.47%
komodo
Komodo (KMD) $ 1.09 11.22%
bitshares
BitShares (BTS) $ 0.048274 2.04%
unibright
Unibright (UBT) $ 1.01 3.79%
coinmetro
CoinMetro (XCM) $ 0.355005 9.15%
ark
Ark (ARK) $ 1.05 4.51%
mirror-protocol
Mirror Protocol (MIR) $ 3.74 3.91%
keep-network
Keep Network (KEEP) $ 0.415380 2.32%
neutrino
Neutrino USD (USDN) $ 1.01 0.31%
iexec-rlc
iExec RLC (RLC) $ 3.30 4.72%
harvest-finance
Harvest Finance (FARM) $ 56.71 2.95%
iotex
IoTeX (IOTX) $ 0.022651 2.62%
badger-dao
Badger DAO (BADGER) $ 12.36 7.45%
redfox-labs-2
RedFOX Labs (RFOX) $ 0.071308 4.85%
empty-set-dollar
Empty Set Dollar (ESD) $ 0.055352 0.40%
ultra
Ultra (UOS) $ 0.376280 1.05%
wanchain
Wanchain (WAN) $ 0.715455 4.24%
iris-network
IRISnet (IRIS) $ 0.076858 7.00%
perpetual-protocol
Perpetual Protocol (PERP) $ 7.78 2.16%
trustswap
Trustswap (SWAP) $ 0.977790 0.03%
tokenlon
Tokenlon (LON) $ 3.55 4.34%
orion-protocol
Orion Protocol (ORN) $ 6.99 2.67%
titanswap
TitanSwap (TITAN) $ 4.33 9.52%
tether-gold
Tether Gold (XAUT) $ 1,870.63 0.73%
wax
WAX (WAXP) $ 0.136174 3.93%
yfii-finance
DFI.money (YFII) $ 1,688.46 1.77%
aelf
aelf (ELF) $ 0.210981 7.76%
haven
Haven (XHV) $ 9.81 9.01%
pax-gold
PAX Gold (PAXG) $ 1,892.73 0.21%
defipulse-index
DeFiPulse Index (DPI) $ 304.86 3.33%
math
MATH (MATH) $ 1.41 1.00%
api3
API3 (API3) $ 2.72 6.94%
sora
Sora (XOR) $ 245.39 10.31%
dent
Dent (DENT) $ 0.003162 5.36%
loom-network
Loom Network (OLD) (LOOMOLD) $ 0.070375 5.96%
nftx
NFTX (NFTX) $ 54.00 0.99%
gala
Gala (GALA) $ 0.009676 5.27%
axie-infinity
Axie Infinity (AXS) $ 3.85 10.75%
beefy-finance
Beefy.Finance (BIFI) $ 1,120.52 3.52%
swingby
Swingby (SWINGBY) $ 0.107053 6.85%
parsiq
PARSIQ (PRQ) $ 0.647135 4.85%
akropolis
Akropolis (AKRO) $ 0.020197 4.55%
nest
Nest Protocol (NEST) $ 0.011688 3.18%
stakehound-staked-ether
StakeHound Staked Ether (STETH) $ 3,719.75 0.00%
akash-network
Akash Network (AKT) $ 2.98 5.45%
cream-2
Cream (CREAM) $ 139.77 8.32%
auto
Auto (AUTO) $ 1,073.49 1.98%
storj
Storj (STORJ) $ 0.936964 3.03%
e-radix
e-Radix (EXRD) $ 0.143858 13.90%
hive
Hive (HIVE) $ 0.332835 7.10%
chainx
ChainX (PCX) $ 5.94 17.31%
wrapped-nxm
Wrapped NXM (WNXM) $ 61.19 3.73%
hathor
Hathor (HTR) $ 0.419237 2.55%
gemini-dollar
Gemini Dollar (GUSD) $ 1.01 0.58%
frontier-token
Frontier (FRONT) $ 0.776191 6.66%
everid
Everest (ID) $ 0.364803 12.13%
lto-network
LTO Network (LTO) $ 0.224518 7.88%
power-ledger
Power Ledger (POWR) $ 0.203865 9.63%
livepeer
Livepeer (LPT) $ 25.83 0.24%
xdai-stake
xDAI Stake (STAKE) $ 7.57 1.53%
rari-governance-token
Rari Governance Token (RGT) $ 5.64 13.98%
cashaa
Cashaa (CAS) $ 0.028404 1.64%
energi
Energi (NRG) $ 1.90 6.45%
bytecoin
Bytecoin (BCN) $ 0.000450 1.53%
duckdaodime
DuckDaoDime (DDIM) $ 11.83 2.72%