YFI cryptocurrency: How it works and where to buy

YFI cryptocurrency: How it works and where to buy

By patou | patou | 30 Aug 2020


YFI is the native token of the Yearn.Finance system.

Yearn.Finance is a DeFi yield farming system, focused on making it easier for users to automatically farm the highest-yields possible with their cryptocurrency.

Cryptocurrency YFI
Total supply 30,000
Inflation None
Network ERC20
Purpose Governance token

How does Yearn.Finance work?

Warning: Yearn should be considered experimental, and a work in progress. There is no guarantee that your funds will be safe when using it.
Yearn is a growing collection of DeFi services, intended to act as a simple gateway for the wider DeFi ecosystem.

Its centrepiece is the ability to automatically invest user deposits in the highest-yielding place available in the DeFi ecosystem, through Yearn Vaults.

Users deposit funds into the vault, and those funds are then collectively allocated to the most lucrative yield farming available, and the returns from those are distributed proportionally to users, accumulating to the yTokens users are given when they make deposits.

Yearn can similarly let people make stablecoin deposits straight to the highest-yielding lending platform available, to earn competitive returns on stablecoins.

In addition to the ease of use, this also helps batch transactions to save on Ethereum gas fees.

The service doesn't come for free though, as performance fees and other costs are extracted along the way. These fees can be paid to YFI token holders as dividends, in an amount the community of token holders agrees on.


What does YFI do?

YFI is purely and simply a governance token. Its holders are allowed to vote on decisions that affect Yearn.

While simple on paper, this can potentially be quite complex and lucrative though, as evidenced by the decision to receive a pay a cut of the service fees to token holders.

And if Yearn becomes a prominent part of the DeFi world over time, other decisions such as support for different assets, and the way returns are paid or reinvested, could have profound impacts on the rest of the market over time.

Yearn encourages YFI token holders to actively participate in governance.

Risks of buying YFI
It's important to remember that YFI is an experiment and a work in progress. There are no guarantees of a successful outcome, or that the token will remain valuable.

In particular, it's essential to remember that Yearn is a public, open-source project which anyone can copy at any time. Yearn has many imitators and competitors, and it will continue to have them. Yearn does not have any kind of proprietary technological edge over its competition.

The value of the YFI token is primarily associated with the community that's grown around Yearn, and is a reflection of people's confidence in the people who are working on Yearn. This makes it extremely unpredictable and highly speculative.

If you are not completely certain of how YFI works and what its value proposition is, it may be safer not to risk your funds.


How to buy YFI

Step 1. Find an exchange
Find an exchange that supports REN, such as Binance.

Step 2. Create an account and make a deposit
Create a Binance account and make a deposit.

Step 3. Buy YFI
Search for a YFI market, and trade a suitable cryptocurrency for YFI.
For example, to buy YFI on the YFI/BTC market you will need to have some Bitcoin to trade for YFI.

For example, to buy YFI on the YFI/BTC market you will need to have some Bitcoin to trade for YFI.

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my Stellar invitation link (XLM): https://coinbase.com/earn/xlm/invite/90yq5v4r

my EOS invitation link (EOS): https://coinbase.com/earn/eos/invite/ngh81mf4

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patou
patou

passionate about crypto, amateur trader, I like to share my knowledge and help.

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