Learn About Yearn.Finance and $YFI

First off, I hope everybody had a wonderful May 22nd yesterday. What is the significance of May 22nd, 2021, you ask? Well, it was the 10th anniversary of the first transaction of Bitcoin. Laszlo Hanyezc paid around 10,000 Bitcoins for two large pizzas. If Laszlo were to sell the same amount of Bitcoin for pizza at its all-time high, approximately $60,000, he would have roughly 20,000,000 pizzas.

Many people say how dumb that was of Laszlo; I mean, he could be a multi-billionaire right now. Did he spend 10,000 Bitcoins on PIZZA? What a DUMMY!

I beg to differ. Laszlo initiated the credibility of Bitcoin as a form of payment for goods and services. Only because of his pizza order are we able to see what the technology has for us today. So, Thank you, Laszlo.

Alright, enough about pizza; it's starting to make me hungry. I want this post to be regarding Yearn.Finance (YFI) and what it is/does and how it shapes the cryptocurrency world today.

If you all are familiar with the popular exchanges (Coinbase, Binance, Blockfolio), then Yearn.Finance is an asset you have probably seen. If you are new to the crypto-verse, then read carefully on how Yearn.Finance is different than other crypto platforms.

---Disclaimer: I am not giving investment advice, I am only making you aware of the recent news regarding cryptocurrency so you can better understand the coin, technology, and the overall effect cryptocurrencies are currently having in the world we live in.---

Question: "What is Yearn.Finance exactly?"
Answer: As described by Yearn.Finance's White Paper, the YFI (sounds like WiFi), is an Ethereum based token that runs on the ERC-20 platform where YFI attempts to move funds around the decentralized finance (Defi) industry for the investor to see high returns on their investment.

The creator of Yearn.Finance is an individual known as "The Father of Defi," Andre Cronje. Andre is the creator of Yearn.Finance and many other platforms such as Eminence, Keeper Network, Deriswap, Fantom, and Fusion. Whew, no wonder he has that nickname.

If you are familiar with the stock market, think of Yearn.Finance similar to a mutual fund or index fund, but for cryptocurrency assets.

Let's talk about the mutual/ index funds for a second. Provided by Dictonary.com, a mutual fund is "an investment program funded by shareholders that trade in diversified holdings and is professionally managed." In these funds, multiple stocks eliminate risk exposure for the investor. You are probably aware of a few mutual/ index funds (S&P 500, Dow Jones, NASDAQ, etc...)

These indexes are to mitigate investor risk. Instead of investing in a particular stock or company, investing in an index allows you to own all companies involved in the index partially. For example, each index has companies from Health Care, Information Technology, Real Estate, and Financials.

How Yearn.Finance is approaching the crypto-verse with this sort of mindset. Your funds consisting of stablecoins (DAI, Tether, USDC) automatically move these assets into different lending protocols for more desirable yields on your investment. Yearn.Finance helps solve a problem Andre had encountered. Like any investor, Andre wanted to maximize his profit. For him to do that, he moved his investments into cryptocurrencies such as Aave ($AAVE) and Compound ($COMP).

Manually moving his investments became very tedious and time-consuming, so Andre constructed a smart contract to help him move his investments into other assets. This smart contract would allow for the automatic movement of assets into other lending cryptocurrencies.

That is a whole is what Yearn.Finance is and how the Defi aspect is changing how we can view and invest in cryptocurrencies. Now don't mix Yearn.Finance and its platform with its YFI token and its place in the industry.

Question: "What is the YFI Token?"
Answer: The YFI token, as previously mentioned, is a token running on the ERC-20 blockchain. The release of the YFI token was in an unfamiliar way than previous launches such as an ICO (Initial Coin Offering). With the YFI creation, only 30,000 tokens are open to circulation. Andre has said through media interviews that the YFI token is "a completely valueless zero supply token with zero financial value." Andre left it up to the Yearn community to establish a form of value for the YFI token. That right there is the most accurate form of decentralization.

Andre changed the single signature administrative key access to a multi-signature administrative key access. Instead of one individual allowing the increase of YFI tokens, all nine administrators would need to sign off and agree to the increase in token supply. Andre is not one of the nine admin key holders, leaving it out of his hands-on how the YFI token will be in the future.

We have seen the cryptocurrency industry in a volatile state (isn't it always?). From seeing all-time-highs in Bitcoin, Ethereum, and several other cryptocurrencies, YFI was right there with the movement. This past month has been no exception. The steady bull market in late 2020 to mid-2021 has seen the first form of price corrections.

Question: "What has been the price of Yearn.Finance's token YFI in the past year?"
Answer: Well, YFI seems to be more volatile than regular cryptocurrencies. On July 20th,2020, YFI saw its lowest price for a single YFI token at $740.00. I wish I had invested then (like every other human) because nearly nine months later, on May 11th, 2021, YFI saw its all-time-high of $96,000.00.

Yes, that number is correct.

If you were the Warren Buffett of cryptocurrency trading and bought at the lowest and sold at the highest, your increase in investment would be 12,873%. That would be one heck of again for anybody.

Currently, the price of YFI has decreased from its $96,000 amount to roughly $28,000 (May 23rd, 2021). In about two weeks the price fell nearly 71%. If volatility is in a discussion and people say Bitcoin is volatile, show them this, and they will most certainly do a double-take.

I've been watching Yearn.Finance for almost three months now, and when it did reach nearly $100,000, I got a tickle of FOMO. With the price drop and negative news surrounding the cryptocurrency industry (Thanks, Elon Musk), I might sit on the sidelines before investing in YFI.

I still am long-term bullish on cryptocurrency, with developers searching for more eco-friendly solutions to validating transactions. A greener crypto-verse is upon us. No, I don't think Bitcoin is "dead". In the five years that I have been watching this industry, the growth and adoption have been constant.
Until next time,
Seth Hinkle

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