Difference between revisions of "Yearn Finance"
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Yearn Finance (YFI) is a decentralized finance protocol which began in early 2020 under the name iEarn Finance. iEarn was maintained by [[Andre Cronje]] but the current Yearn is maintained by a DAO. | |||
== History == | == History == | ||
Originally, iEarn was a series of yield bearing tokens which rebalanced to the [[Lending|lending markets]] with the highest yield (usually [[Aave|AAVE]] or [[Compound]]).<ref>https://thedefiant.io/what-is-yearn-finance/</ref>During [[DeFi Summer|DeFi summer]], the protocol released a fair-launched governance token called [https://www.coingecko.com/en/coins/yearn-finance YFI] and rebranded to Yearn Finance. The launch is credited to have birthed the concept of Pool 2<ref>https://www.coindesk.com/markets/2020/12/08/andre-cronje-defi-expressionist/</ref>, it took place on [[Curve Finance]] and [[Balancer]]. Today the protocol is maintained by various independent developers and contributors of the Yearn DAO and it is governed by $YFI holders. | |||
[[File:Yearn.png|thumb|Yearn Finance]] | |||
The current user-facing core product of Yearn is yVaults, which | The current user-facing core product of Yearn is yVaults, which provide [[Yield optimizer|automated yield generation]] to many different crypto assets, each driven by one or more Strategies. | ||
== Design == | == Design == | ||
=== Yearn Vaults (yVaults) === | === Yearn Vaults (yVaults) === | ||
yVault is short for Yearn Vault. In Yearn’s current version (v2) these are the characteristics of a yVault: | |||
* The token you deposit in a yVault is the token | * The token you deposit in a yVault is the token that receives yield, always automatically compounded into the yVault. | ||
* A yVault may have many strategies active at the same time. A yVault may change its strategies capital allocation when it deems necessary | * A yVault may have many strategies active at the same time. A yVault may change its strategies capital allocation when it deems necessary. | ||
* Unlike many other yield aggregators there are no deposit/withdrawal fees charged to the user | * Unlike many other yield aggregators there are no deposit/withdrawal fees charged to the user. | ||
* | * yVault tokens implement the [[ERC20]] standard, this means that they can be easily moved between wallets and markets and can be used by any app that communicates with this standard (like [[decentralized exchanges]]). | ||
=== Strategies and Strategists === | === Strategies and Strategists === | ||
Strategists are people that build one or more underlying Strategies for yVaults | Strategists are people that build one or more underlying Strategies for yVaults. | ||
Anyone can build a Strategy, but in order to get it added to a yVault, the strategist needs to pass the strategy through the strategy vetting process<ref>https://docs.yearn.finance/developers/v2/getting-started#overview-of-our-vetting-process</ref> which includes concept vetting, code review, security review, and mainnet testing. | Anyone can build a Strategy, but in order to get it added to a yVault, the strategist needs to pass the strategy through the strategy vetting process<ref>https://docs.yearn.finance/developers/v2/getting-started#overview-of-our-vetting-process</ref> which includes concept vetting, code review, security review, and mainnet testing. | ||
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=== YFI token === | === YFI token === | ||
In July 2020 the YFI token was introduced as a way for Andre to decentralize control of Yearn by distributing 30.000 YFI tokens. The 30.000 YFI would be | In July 2020 the YFI token was introduced as a way for Andre to decentralize control of Yearn by distributing 30.000 YFI tokens. The 30.000 YFI would be distributed only to uses who provided liquidity on Yearn. YFI launched with no pre-mine, no pre-sale, and no allocation to the team.<ref>https://medium.com/iearn/yfi-df84573db81</ref> Another 6,666 YFI were minted by [https://gov.yearn.finance/t/yip-57-funding-yearns-future/9319 YIP-57] in order to fund Yearn's future, so the total supply of YFI is 36,666. | ||
As the governance token of Yearn, | As the governance token of Yearn, YFI tokens allow holders to vote on various decisions proposed by community members. Starting with Yearn Improvement Proposal 36 ([https://yips.yearn.finance/YIPS/yip-36 YIP-36]) a portion of staking rewards were used to cover operational expenses and reward token holders. [https://snapshot.org/#/yearn/proposal/Qmb6gBzjvgLMazSrQQGVcjutLNdkVyM2Lh6yckMzdoaHWZ YIP-56] disbanded the staking system in favor of a buyback system. [https://medium.com/iearn/yearn-governance-explained-proposals-yfi-token-and-execution-113ec86c3a3f Check this article for more information about governance at Yearn.] | ||
== External Links == | == External Links == | ||
Latest revision as of 01:18, 5 May 2022
Yearn Finance (YFI) is a decentralized finance protocol which began in early 2020 under the name iEarn Finance. iEarn was maintained by Andre Cronje but the current Yearn is maintained by a DAO.
History
Originally, iEarn was a series of yield bearing tokens which rebalanced to the lending markets with the highest yield (usually AAVE or Compound).[1]During DeFi summer, the protocol released a fair-launched governance token called YFI and rebranded to Yearn Finance. The launch is credited to have birthed the concept of Pool 2[2], it took place on Curve Finance and Balancer. Today the protocol is maintained by various independent developers and contributors of the Yearn DAO and it is governed by $YFI holders.
The current user-facing core product of Yearn is yVaults, which provide automated yield generation to many different crypto assets, each driven by one or more Strategies.
Design
Yearn Vaults (yVaults)
yVault is short for Yearn Vault. In Yearn’s current version (v2) these are the characteristics of a yVault:
- The token you deposit in a yVault is the token that receives yield, always automatically compounded into the yVault.
- A yVault may have many strategies active at the same time. A yVault may change its strategies capital allocation when it deems necessary.
- Unlike many other yield aggregators there are no deposit/withdrawal fees charged to the user.
- yVault tokens implement the ERC20 standard, this means that they can be easily moved between wallets and markets and can be used by any app that communicates with this standard (like decentralized exchanges).
Strategies and Strategists
Strategists are people that build one or more underlying Strategies for yVaults.
Anyone can build a Strategy, but in order to get it added to a yVault, the strategist needs to pass the strategy through the strategy vetting process[3] which includes concept vetting, code review, security review, and mainnet testing.
For their efforts, strategists are rewarded with a portion of the strategy’s performance fee.
- Up to 10% of the generated yield fees by a specific strategy (performance fee) goes to the strategist
- 10% of the generated yield fees by all strategies (performance fee) goes to the Yearn DAO treasury.
- Over the year 2% of the vault’s total assets are taken as fees which go to Yearn to pay for expenses like gas, developer grants, and other services.
YFI token
In July 2020 the YFI token was introduced as a way for Andre to decentralize control of Yearn by distributing 30.000 YFI tokens. The 30.000 YFI would be distributed only to uses who provided liquidity on Yearn. YFI launched with no pre-mine, no pre-sale, and no allocation to the team.[4] Another 6,666 YFI were minted by YIP-57 in order to fund Yearn's future, so the total supply of YFI is 36,666.
As the governance token of Yearn, YFI tokens allow holders to vote on various decisions proposed by community members. Starting with Yearn Improvement Proposal 36 (YIP-36) a portion of staking rewards were used to cover operational expenses and reward token holders. YIP-56 disbanded the staking system in favor of a buyback system. Check this article for more information about governance at Yearn.
External Links
- Website: https://yearn.finance/
- Protocol Documentation: https://docs.yearn.finance/
- Governance Forum: https://gov.yearn.finance/
- The Blue Pill (Yearn DAO vision): https://yfistory.org/thebluepill
- Contributors Page (Join the YFI team!): https://yearnfinance.notion.site/Contributors-bceb03566612483ca139f800fb5452ad
- Blog: https://blog.yearn.finance/
- Twitter: https://twitter.com/iearnfinance
- Discord: https://discord.com/invite/6PNv2nF
- Reddit: https://www.reddit.com/r/yearn_finance
- Telegram: https://t.me/yearnfinance/