Yearn.Finance (YFI), a fully-fledged DeFi ecosystem
A look back at the yearn.finance project to illustrate the importance of the collaborations announced over the last few days, a sign of the maturation of the project and of the decentralised finance sector as a whole.
Yearn is originally a man’s project starting in February 2020. Andre Cronje enters the Ethereum ecosystem with the construction of Crypto Investor an aggregator calculating the on-chain interest rates (APY) generated by a first generation of DeFi products, namely Compound, Fulcrum, Aave or DxDy before the Cambrian explosion of DeFi products last summer.
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It begins with this notion of aggregation to offer a service in the continuity of rate calculation, allowing investment vehicles to be invested in which seek the best market rate for the given asset.
After a very productive month of February, some turmoil in March pushed the developer to leave his project, tired of the pressure from the community and following the cost generated by all the trials and other smart-contract deployments.
He conceded a few mistakes in a post medium while dedicating his mantra: „I test in prod“ by announcing his return.
The project explodes in the summer with the launch of the YFI governance token to build a community to support it and align interests between all parties. The launch of the token is described as a „fair launch“ because of the following characteristics:
- No investors or venture capital funds in advance of this event
- A one-week launch via liquidity mining (cf: article)
- An offer of tokens limited to 30.000
The token gives access to participation in governance votes as well as to the capture of part of the costs generated by the ecosystem in proportion to its ownership.
The term ecosystem is indicative of the ambition expressed by Andre Cronje to attack all the verticals of decentralised finance, namely :
- Decentralised and automated exchanges
- Intelligent investment vehicles
By creating a community, a team of 10 people paid out of the cash generated was able to structure itself, leaving the South African developer time to focus on the origination and first iterations of several Yearn related projects with for example:
- Keep3r: A system allowing to delegate the realization of jobs to third parties.
- Deriswap: A platform giving access to on-chain options and futures contracts
- Stablecredit: A service allowing to obtain a tokenized line of credit by depositing collateral
The team includes developers, designers and editors who provide regular content in the form of newsletters.
This overall structure is sound and is moving in the right direction to go beyond the test production phase.
The total value in the „Vaults“, vehicles (ie smart-contract) that invest in the best DeFi services exploded with the event in mid-July of the token generation.
The Vault is similar to the operation of a hedge fund in traditional finance. It is an automated investment vehicle, neutral, less costly in transaction costs (gas) and open to all, whether it is for an individual wishing to deposit 1,000 euros in crypto equivalent or 1 million euros for an institutional investor.