Have you heard about Yearn Finance’s YFI token? It serves as a governance token for its decentralized finance platform.
It surpassed Bitcoin’s all-time high in USD prices. The YFI token reached highs of over $38,000 in August and even surpassed $43,000 in mid-September 2020.
What sets the YFI project apart from other governance tokens in DeFi? Scarcity! The supply of YFI tokens is extremely limited. The maximum supply will never exceed 30,000 YFI tokens. Currently, there are 29,968 YFI tokens in circulation, according to CoinMarketCap.
This article explores the various Yearn Finance projects and forks. Let’s discover what makes each project unique and their purposes. If you are not very familiar with yield farming, check out our detailed guide on yield farming.
We’ll cover the following projects:
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- Yearn Finance (YFI)
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- Yearn Finance Fork (YFII) – DFI.money
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- Yearn Value (YFV)
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- Yearn Finance Link (YFL)
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- Yearn Fuel (YFUEL)
Yearn Finance (YFI)
Yearn Finance started in February 2020 with a project known as iEarn Finance. Later, Andre Cronje rebranded iEarn to yEarn. You can consider yEarn the first professional attempt at creating a yield farming project, but it has added more capabilities.
Yearn Finance is a DeFi platform where users can deposit and stake their ERC20 tokens. In return, they receive daily interest. This is made possible by allocating the capital to staking pools offering the best returns across the network.
Why was this revolutionary? Before yield farming became popular, users had to stake individually with each protocol and learn about many projects. Using the Yearn project, users didn’t have to navigate multiple DeFi sites to earn yield farming profits. Yearn solved this by integrating many different blockchain protocols. Users only need to stake tokens once with Yearn to access many interest-yielding blockchain protocols. To maximize profits, the Yearn protocol continuously rebalances as yield-farming opportunities shift.
Yearn Finance Fork (YFII) – DFI.money
YFII was forked by the Chinese crypto community from YFI, YFI’s first fork. The YFII token is currently very popular in the Chinese DeFi ecosystem. The YFII fork was created because a governance vote for YFI wanted to introduce weekly halving to the project, referred to as the YIP-8 proposal.
However, this proposal failed to pass. Therefore, the YFII fork has been created to implement the halving proposal. In other words, the YFII project has a 98% code similarity with the YFI project.
The maximum supply of YFII has been capped at 40,000. Initially, YFII was perceived as a scam, leading to its blacklisting by Balancer. However, the YFII token is performing well today, with its recent ATH being $6000.
YFValue (YFV)
YFValue, represented by YFV, is a fork of YFII. It was announced on August 16th, 2020, through a Medium post. What’s the role of the YFV token? It acts as a governance token for the YFValue protocol. Their aim is to make yield farming accessible to all users worldwide. They strive to make yield farming more inclusive to fulfill their mission of accessibility: “Bring farming to everyone.”
So, does YFV have any unique features? Yes, it does. The YFV token grants its holders the right to vote to control the rate of the supply and the referral system. The token burning is automated and occurs fully on-chain. The maximum supply of YFV tokens has been capped at 15,750,000.
Additionally, YFValue’s mission includes “insurance.” They aim to use “an insurance treasury through contributions from the YFV team and community funds to engage and integrate an insurance protocol, such as Nexus Mutual, to reduce risk for all YFV stakeholders.”
Yearn Finance Link (YFL)
Yearn Finance Link, known by its ticker symbol YFL, was announced in a Medium post dated August 7th, 2020. It’s a modified version of the YFI tokens.
The project aims to leverage the DeFi-backed governance token to achieve more for Chainlink supporters. It originated from the Chainlink community.
The YFL development team forked Andre Cronje’s YFI project and adapted it to allow for staking LINK. Later, they introduced the concept of yield farming to LINK holders. The maximum supply is capped at 85,000. Many analysts refer to YF Link as the connecting bridge between ChainLink and Yearn Finance.
An example: you can deposit LINK and YFLINK tokens into a Balancer pool to earn BPT tokens. Then, those BPT tokens can be staked with the YFLINK pool. This allows you to earn YFLINK from the YFLINK pool and BPT from the Balancer pool. Moreover, Yearn Finance Link hosts five different pools, each with unique configurations for increasing yield.
Yearn Fuel (YFuel)
The project aims to make Yearn Finance truly accessible. Whether a user is a big whale or a small investor, Yearn Fuel wants to make Yearn Finance accessible to everyone.
It has unique features, including the right to vote to control the inflationary rate of the supply. Additionally, the YFuel token allows users to vote on the referral system. It includes automatic burning, which occurs fully on-chain.
They are also implementing a new token burning economic model called “Grafuel.” Under the Grafuel model, they will burn up to 1% of the total token supply per month, starting on the 15th of each month. The idea behind this model is to increase liquidity.
Wrapping Up the Yearn Finance Universe
It’s interesting to see so many Yearn Finance clones emerging to meet the different needs of yielders. However, this has also led to another wave of crypto scams, where people create new Yearn Finance clones with slightly modified rules. This resembles the crypto craze seen during the ICO boom, where people blindly invested in yield farming projects, expecting significant returns.
Nevertheless, yield farming has proven to be a successful case for DeFi, generating enough momentum to shift crypto markets from bearish to bullish.
YFI tokens, initially envisioned as valueless, have risen in price, contradicting that notion.
How long can this boom last? These tokens have solid use cases, and their limited supply drives prices higher. The success of yield aggregation platforms has helped YFI clones thrive. While some YFI clones may fade over time, we are witnessing something remarkable.
