1/ I received lots of thankful DM's from people for my thread on @sushiswap so I am going to provide the same for $YFI
Btw, I am still mad at myself for sticking to my principle of not throwing money at unaudited projects and not buying $YFI.
Instead I bought in at $10k…
Btw, I am still mad at myself for sticking to my principle of not throwing money at unaudited projects and not buying $YFI.
Instead I bought in at $10k…
2) In essence, @iearnfinance is a yield aggregating protocol on Ethereum.
Instead of chasing yields by yourself (which is hard), give it to @iearnfinance, which will allocate it across various DeFi lending protocols to get you the BEST return.
Instead of chasing yields by yourself (which is hard), give it to @iearnfinance, which will allocate it across various DeFi lending protocols to get you the BEST return.
3/ The protocol currently offers five products but it’s developing at light-speed so really, it is difficult to predict what @iearnfinance will or will not be tomorrow. 
4/ Here’s a nice overview of the five different products ( found on Twitter )
They are all cool and useful but the two most used products by far are EARN and VAULTS.
They are all cool and useful but the two most used products by far are EARN and VAULTS.
5/ EARN let’s you deposit stablecoins like $DAI or $USDC into a pool and then @iearnfinance’s contracts search for the best rates across lending protocols like
@aave,
@compound,
@bzx and others.
@aave,
@compound,
@bzx and others.
6/ Every time a new user deposits assets the contracts search functions get triggered.
This means they constantly re-iterate and re-allocate your funds based on the current optimal strategy.
This means they constantly re-iterate and re-allocate your funds based on the current optimal strategy.
7/ As you might notice this saves you both time and money, as the gas costs to move money across protocols is spread amongst all depositors.
It also takes some load off the Ethereum network, which is struggling to keep pace with the increasing interest in DeFi and yield farming.
It also takes some load off the Ethereum network, which is struggling to keep pace with the increasing interest in DeFi and yield farming.
8/ Instead of everyone yield farming solo, thousands of individual transactions are replaced by a couple of transactions executed by the iearn contracts.
Economies of scale 📈✅
Now let's look at Vaults, iearn's cash cow product ⬇️
Economies of scale 📈✅
Now let's look at Vaults, iearn's cash cow product ⬇️
9/ VAULTS also pool user funds similar to EARN except they do more unconventional things (a.k.a yield farming).
By allocating user funds to specific protocols that distribute governance tokens, which can be sold on DEX's, Vaults achieve much higher yields
By allocating user funds to specific protocols that distribute governance tokens, which can be sold on DEX's, Vaults achieve much higher yields
10/ Let’s look at the $yCRV vault for example. This is iearns best performing vault currently earning 90%APY.
To understand how it works we need to understand @CurveFinance.
Curve is a DEX that lets users swap stablecoins like USDC, USDT etc at extremely low costs and slippage.
To understand how it works we need to understand @CurveFinance.
Curve is a DEX that lets users swap stablecoins like USDC, USDT etc at extremely low costs and slippage.
11/ Unlike centralized exchanges out there that match a buyer and a seller, Curve uses liquidity pools like @uniswap.
To offer efficient and inexpensive swaps, Curve needs liquidity providers (LP’s) to provide stablecoins.
cryptotesters.com/blog/what-are-…
To offer efficient and inexpensive swaps, Curve needs liquidity providers (LP’s) to provide stablecoins.
cryptotesters.com/blog/what-are-…
12/ LP’s provide stablecoins to the Curve pool.
In return they receive a portion of the trading fees.
Curve is incredibly efficient at its job so these trading fees sum up and provide nice returns to LP’s.
In return they receive a portion of the trading fees.
Curve is incredibly efficient at its job so these trading fees sum up and provide nice returns to LP’s.
14/ This lending is executed by @iearnfinance which is why Curve LP’s who want to get those extra %’s need to deposit their stablecoins into Curve’s Y-Pool and not in other Curve pools.
When you deposit a stablecoin like $DAI or $USDT into Curve’s Y-Pool you get $yCRV in return.
When you deposit a stablecoin like $DAI or $USDT into Curve’s Y-Pool you get $yCRV in return.
15/ $yCRV then represents your share in the underlying liquidity pool consisting of different stablecoins like $DAI, $USDT, $USDC, and $TUSD.
You can redeem your $yCRV anytime against any of the stablecoins above.
You can redeem your $yCRV anytime against any of the stablecoins above.
16/ Your $yCRV balance constantly increases because it earns interest and trading fees.
It is an interest earning token.
But this is not all.
You can then take your $yCRV and go to yearn.finance and lock it in the $yCRV pool to earn ADDITIONAL rewards.
It is an interest earning token.
But this is not all.
You can then take your $yCRV and go to yearn.finance and lock it in the $yCRV pool to earn ADDITIONAL rewards.
17/ Behind the scenes, @iearnfinance locks those $yCRV in the Curve gauges earning $CRV rewards.
$CRV is Curve’s governance token which all liquidity providers receive.
Alternatively, you could lock your $yCRV in a Curve gauge yourself but iearn automates this process for you.
$CRV is Curve’s governance token which all liquidity providers receive.
Alternatively, you could lock your $yCRV in a Curve gauge yourself but iearn automates this process for you.
18/ It boosts the Curve rewards by 2.5x by locking a portion of $CRV’s in a special governance contract and continuously sells $CRV on the market.
This is why the APY is so high.
The APY variable because it depends on many factors like the price of $CRV, the trading fees ..
This is why the APY is so high.
The APY variable because it depends on many factors like the price of $CRV, the trading fees ..
19/ .. earned on Curve exchange, the interest rates on external lending protocols etc.
This is just one Vault, there are many more and each has its own strategy.
This is just one Vault, there are many more and each has its own strategy.
20/ What’s really phenomenal about iearn is the community and governance and how the protocol aligns incentives to make the community participate.
$YFI is the governance token of the yearn protocol and it was distributed to early stakers over a 2 week time period.
$YFI is the governance token of the yearn protocol and it was distributed to early stakers over a 2 week time period.
21/ There was no pre-mine, no VC’s or anything alike.
30.000 $YFI 's went to the community of early stakers.
Although $YFI was presented as a “valueless token” by iearn’s founder @andrecronjetech its price is currently over $30.000.
30.000 $YFI 's went to the community of early stakers.
Although $YFI was presented as a “valueless token” by iearn’s founder @andrecronjetech its price is currently over $30.000.
22/ In reality, the token has developed value due to its constrained supply and high demand.
The protocol levies a 5% withdrawal fee, every time a user withdraws from a vault, which is then used to buy $YFI on the market (similar to share buyback).
The protocol levies a 5% withdrawal fee, every time a user withdraws from a vault, which is then used to buy $YFI on the market (similar to share buyback).
23/ $YFI is also needed to vote on every strategic decision the protocol undertakes.
Once a proposal passes governance it gets implemented by a team of core developers.
Anyone in the community can submit a new and improved strategy for a vault.
Once a proposal passes governance it gets implemented by a team of core developers.
Anyone in the community can submit a new and improved strategy for a vault.
24/ If the strategy rallies enough votes, the developer behind the strategy receives 10% of the fees collected by the protocol for the specific strategy.
25/ But even without monetary incentives the community is incredibly active.
It’s truly amazing to see for example designers submit implementation-ready interfaces to improve the user experience of the protocol without being paid for it.
It’s truly amazing to see for example designers submit implementation-ready interfaces to improve the user experience of the protocol without being paid for it.
If this was all to complicated any you're even more confused than before start reading up on DeFi at @cryptotesters
I'll turn this into a more comprehensive blog post on $YFI if there is demand
cryptotesters.com/blog/what-is-d…
I'll turn this into a more comprehensive blog post on $YFI if there is demand
cryptotesters.com/blog/what-is-d…
