What is Yield Farming and Delegated Vaults? In 2021, Yearn Finance continues to solidify its position as the gold standard for yield aggregator in which it managed to hit an all-time high of $91,000 on May 12th, 2021 alongside with the peak of the cryptocurrency markets. At its initial release, because there were no fundraising nor valuation placed on Yearn Finance, the market did not fully comprehend the value captureВ andВ not able to figure out the market value for it.ДЄs Yearn Finance continued to attract liquidity by allowing people to easily earn and participate in DeFi, YFI token went from $30 to $43,000 within 2 months from its launch. Yearn Finance was launched in July 2020 and its governance token, YFI was released to the community through a fair launch. It is akin to a crypto hedge fund where the aim is to increase the amount of assets that users deposited. End users also do not need to have proficient knowledge of the underlying protocols involved or DeFi, thus the Vaults represent a passive-investing strategy. Vaults benefit users by socializing gas costs, automating the yield generation and rebalancing process, and automatically shifting capital as opportunities arise. Basically, the vault will help users to claim yield farming rewards and sell it for the underlying assets. Yearn Finance debuted the vault feature after its token launch, igniting a frenzy on automated yield farming and is considered the initiator of the category of yield farming aggregator. Later on, it collaborated with Curve Finance to release a yield-bearing USD tokens pool that includes four y-tokens: yDAI, yUSDT, yUSDC and yTUSD, it is named as yUSD. For example, if a user deposits DAI into yearn.finance, the user will receive yDAI token in return, which is a yield-bearing DAI token. The service offered includes major USD tokens such as DAI, USDT, USDC, and TUSD. Funds are shifted between dYdX, AAVE, and Compound automatically as interest rates change between these protocols. It started out as a passion project by Andre Cronje to automate the process of switching capital between lending platforms in search of the best yield offered, as the lending yield is a floating rate rather than fixed rate.

The protocol is maintained by various independent developers and is governed by YFI holders. Meanwhile, people who provide a certain amount of yTokens back to Yearn Finance receive YFI, a cryptocurrency that gives users the right to make changes in the yearn.finance protocol via on-chain proposals and voting.Yearn Finance is a suite of products in Decentralized Finance ( DeFi) that provides lending aggregation, yield generation, and insurance on the Ethereum blockchain. So when a user deposits his/her tokens into the yearn.finance pool, they receive yTokens in return. Yearn Finance, as a project, aggregates lending services such as Aave, Compound, Fulcrum, and DyDx, to find the best yields for its users. Part of the reason could be an underperforming yield farming sector itself. While a $950 million worth capital reserves showed that more users were choosing Yearn Finance for its lending aggregator services, the demand for the product failed to excite traders in increasing their exposure in YFI. The ballooning liquidity pool and falling prices expressed conflict between YFIвЂ™s fundamental and technical aspects. Source: DeFi Pulse Total value locked in the Yearn Finance pool. Total value locked in the Yearn Finance pool.

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