Should You Buy Yearn Finance?

Last Updated May 12th 2022

20 Min Read

Are you contemplating whether you should buy Yearn Finance?

This article takes an overview of Yearn Finance, its core areas of business, and - most importantly for prospective investors - the pros and cons which can help answer the question: should you buy Yearn Finance?

Yearn Finance has been known to be a bit complicated when compared to other decentralized applications. This is why several sceptics who are new to Yearn Finance investing ask questions like, is it worth investing in Yearn Finance, or should I buy Yearn Finance?

Looking at these questions from a fundamental and technical standpoint, the answer is YES. Yearn Finance is likely one of the best performing cryptocurrencies on the market and investing in Yearn Finance could bring you enormous gains you never thought possible.

Yearn Finance continues to enjoy an uptrend ever since it appeared on cryptocurrency exchanges in July 2020. Many analysts foresee YFI command relatively higher prices than its all-time high price above $95,000 in the future. Most of them also believe investing in Yearn Finance will result in some form of gains. This is because the cryptocurrency and its issuing protocol are known to provide high yields for its investors and depositors. This is the main reason why you should consider buying and investing in Yearn Finance.

With the buzz around decentralized finance, is Yearn Finance a good investment?

Most importantly, for novice traders and investors - what are the pros and cons that can help answer the question; should you buy Yearn Finance?

Contents:

Yearn Finance at a Glance
PROS of Buying Yearn Finance
CONS of Buying Yearn Finance
Yearn Finance Price Prediction: What Are Analysts Saying About Yearn Finance?
How to Invest in Yearn Finance / Where Can I Buy Yearn Finance?
The Bottom line - should you Buy Yearn Finance?
FAQs

Yearn Finance At A Glance

Here we will have an overview of the beginnings of the protocol and its cryptocurrency. In simple terms, we will define what is Yearn Finance, the history of Yearn Finance, how many Yearn Finance coins are in supply and the price performance of Yearn Finance from 2020 to date.

Who Created Yearn Finance?

Who is Andre Cronje? Andre Cronje is a rogue programmer who designed Yearn Finance (YFI). Cronje was working for some companies across financial technology (Fintech), big data, insurance, and distributed ledger technologies before venturing into researching cryptocurrencies.

The possibilities of blockchain technology led him down the path to creating Yearn Finance (YFI). After being left unimpressed by the high volatility and speculative nature of cryptocurrencies, he instead became fascinated by the concept of decentralized finance protocols.

The introduction of stablecoins and the kind of yields it offered lured Cronje into considering the creation of a decentralized application that can take advantage of this unique innovation.

He went on to manually move funds to the stablecoin or decentralized lending platforms that had the highest annual percentage yield (APY). Due to the stress involved in manually going about this activity, Cronje created a program that would automatically handle the switch of funds between decentralized finance (DeFi) protocols.

He came to the utmost conclusion that the automatic switches enabled him to optimize yields. After scaling his innovation up to the standards of a decentralized application, he made it a convenient tool that could be used by the masses.

What is Yearn Finance?

Yearn Finance is an ERC20 token of decentralized aggregators that utilize lending services such as dYdX, Aave, Compound, and Fulcrum to optimize yield for its users. The project was launched in February 2020. Yearn Finance exists as three separate but interconnected things and they are, the Yearn Finance protocol, its novel token YFI which governs the protocol, and the Yearn Finance Team. There are four essential features as Iborrow Finance, Ytrade Finance, Yswap Exchange, and Yliquidate Finance.

What is the purpose of Yearn Finance?

The main purpose of Yearn Finance is to provide a great opportunity for people to make huge interests on their deposits. Instead of spending time reading and researching about the possibilities of decentralized lending platforms and getting to know the pros and cons that make them a good investment, all users have to do is choose Yearn Finance to manage their yield.

How Many Yearn Finance Coins Are In Supply?

Currently, there are 36,637.72 YFI circulating on the market from a total and maximum supply of 36,666 YFI.

Yearn Finance Price Performance in 2020

Yearn Finance appeared on cryptocurrency exchanges on 20th July 2020 as per data retrieved from CoinMarketCap. On that day, YFI opened at $1,049.67, reached an intraday high of $1,261.22, a low of $1,022.8, and finally settled at $1,118.17.

At the time it had been close to 2 months since the first round of the coronavirus stimulus packages were distributed. With the market still recovering from the new high lows suffered during March and April where all assets across stocks, commodities, metals, and cryptocurrency plunged, there were new kinds of investors. These investors were unsophisticated. Buoyed by their checks, they invested in Yearn Finance and other digital assets without reading fundamental analysis or backing their stakes with technical analysis from leading portals in the market. On the last day of its opening trading month (31st July), YFI opened at $4,353.30, reached a new all-time high of $4,725.41, and closed the day at $4,329.53. In just 11 days, Yearn Finance returned 312.466%.

YFI crossed $5,000 for the first time on 6th August and reached a new high of $5,455.30 on 7th August. The crypto trading asset surpassed the $6,000 price milestone on 11th August and increased substantially to close on 18th August at $9,717.91. With trading volumes of $509 million up to a new high of $938 million on 30th August, Yearn Finance crossed several milestones ($10,000, $15,000, $20,000, 25,000, $30,000, and $35,000) and finally settled at $35,102.08 on the last day of August. In August, YFI returned as much as 711.453% for investors.

The first sign of arbitrage trading where users take advantage of a spike in price in similar assets and lock gains was demonstrated in September. On 1st September, Yearn Finance opened at $35,098.40, reached an intraday high of $36,586.34, and reached a low of $32,139.30 to close the day. A huge sell-off ensued and in the space of 4 days, the digital asset reached a new low of $18,755.92 on 5th September. An UPTREND took over the crypto token and it rallied to a high of $43,873.82 on 12th September. Based on speculation and a revisit of arbitrage trading, holders of YFI who missed out on the gains from the start of the month decided to embark on huge selling. This plunged the asset to a low of $23,848.34 to see out the 3rd quarter of the year. In September, YFI lost 32.0529% of its price.

With consistency in the trading volume, the bubble in YFI burst as more holders decided to let go of their investments. As a result, the crypto trading asset opened on 1st October at $23,856.20 and by the close of 15th October had a trading price of $14,501.55. The relatively lower price lifted the hopes of long-term investors who foresaw a huge leap in price towards the end of the month. Unfortunately, they were wrong as YFI plummeted into new high lows it had not revisited in 2 months. On 31st October, Yearn Finance traded for a coin at $10,480.22. In the process, YFI shed 56.0692% of its opening month price.

With whispers of the 2nd stimulus package hitting bank accounts towards the end of the year, YFI peaked again. After opening at $10,480.22 on 1st November, Yearn Finance reached $17,593.57 and thrived on increasing trading volume which reached $1,145,379,048 and $1,160,345,721 on 18th and 19th November respectively. The governance token behind the yield aggregation protocol opened on 30th November at $24,635.59 and closed the day at $26,370.32. YFI returned 151.62% for investors.

The 2nd stimulus package arrived in December and helped stabilize the price of Yearn Finance. YFI opened on 1st December at a trading price of $26,412.57 and re-tested $24,793.52 in the middle of the month. The crypto-token opened at $21,857.03, reached an intraday high of $23,435.70, and $22,738.15 to end the year.

Yearn Finance Price Performance in 2021

The year 2021 was labelled as the best time for decentralized finance. Yearn Finance and other DeFi coins have raked in massive gains for long-term holders of the digital asset. With institutional investing taking over the crypto finance space, YFI opened on 1st January at $22,731.77 and closed at $21,901.97. Yearn Finance opened on 15th January at $32,698.38, hit an intraday high of $33,522.81, and closed the day at $30,266.32. YFI closed in January at $30,176.13.

Bitcoin (BTC), Ether (ETH), and Binance Coin (BNB) made huge gains in February. This was reflected positively in other altcoins such as Yearn Finance. YFI began the month at $30,170.52 and closed on 15th February at $40,252.06. With a new high of $47,920.77 reached on 20th February, the next price milestone YFI was forecasted to reach was $50,000. This led to numerous written articles about Yearn Finance and Bitcoin as to which digital assets will surpass the $50,000 mark sooner. YFI closed the month strong by settling at $30,695.31.

Yearn Finance opened at $30,719.63 on 1st March, re-tests $36,524.60 in the middle of the month, and closed the month at $36,133.54.

There was a huge spike in prices of digital assets in April backed by the effects of the listing of BTC by Tesla in March. Yearn Finance benefitted strongly from increased use rates across its platform and decentralized lending platforms. This saw the digital asset open at $36,146.29 on 1st April, soar to $53,176.03 by 15th April and end the month with a trading price of $48,901.34.

In May, YFI maintained its trading price and crossed several milestones ($55,000, $60,000, $70,000, $75,000, $80,000, $85,000, and $90,000). It eventually settled at a new all-time high price of $93,435.53 on Wednesday, 12th May on the back of a $2,420,866,986 trading volume. Arbitrage Trading backed by the fear of missing out (FOMO) on such huge gains returned and took over YFI. With thousands of people selling their YFI holdings, investor interest in the asset started to go down and was reflected in its trading volume towards the end of the month which was more than $386 million.

Due to a bearish outlook of the crypto market backed by China’s stance on the use of cryptocurrencies as well as shutting down several mining centers across the country, all assets dropped in price. This saw YFI consistently shed its price. Yearn Finance opened June at $47,058.87 and the month at $33,844. In July the price dropped to $25,809.

The upward trend pushed YFI price to hit $42,919 in September. On 14th December 2021, YFI reached the crucial bottom of $19,585, it closed the year at $32,947.

But what are the primary drivers behind the bullish predictions? In a nutshell, what are the pros and cons of investing in Yearn Finance that can embolden you to decide on the crypto trading asset?

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Pros Of Buying Yearn Finance

What Are The Advantages Of Investing In Yearn Finance (YFI)?

YFI can reach huge milestones as per projections made by many analysts. But before you decide to take such a bold step, what are the pros of investing in Yearn Finance that can take the DeFi coin to such heights in valuation.

✅ Yearn Finance Is Accessible

The ease of accessing a cryptocurrency is extremely crucial to its survival. Yearn Finance (YFI) can be found on almost all the top cryptocurrency exchanges globally. Being listed on a particular exchange does not automatically make a digital asset a good investment. But you should note that the millions of people who patronize those trading platforms have easy access to trading or investing in Yearn Finance. T

YFI is one of the premier DeFi coins in the market and from the hype around yield farming; it is one of the cryptocurrencies that continues to see huge liquidity daily. This is the primary reason why YFI continues to record relatively higher trading volumes when compared to other DeFi coins. At the time of writing, YFI had a trading volume of $224 million. This is a sign of strength and a future to look forward to.

Check Out: Is It Worth Investing in Yearn Finance?

✅ It Supports a Range Of Stablecoins

According to Paulina Likos, “Stablecoins are cryptocurrencies that are backed by an asset, most often a fiat currency.” The most important thing about stablecoins is that it helps you manage volatility in the crypto finance space. Since Yearn Finance works by converting stablecoins into an equivalent of ytokens, it must have a range of stablecoins to support. Yearn Finance supports USDC, DAI, TUSD, and sUSD. Since every investor has a particular stablecoin they would love to use, this meets the standards of millions of people. With a range of options of stablecoins to choose from, more users will patronize the platform, pour more liquidity into the protocol, and in the long term reflect positively on the price of YFI.

✅ Yearn Finance is Community-Driven and Highly Decentralized

Yearn Finance is one of the most decentralized digital assets in the market. For any upgrades that happen on the platform, all holders are entitled to the same votes.

To put it simply, one token is equivalent to one vote. Founder Cronje has placed his funds in the system. What’s more, he has pledged that he would be one of the last people who will withdraw their funds out of Yearn Finance. There are projects where decisions are in the hands of a significant few who normally comprise the team behind the project.

Yearn Finance is extremely different and has garnered respect across the space for being a pioneer of decentralization. Once several users of an asset feel their views and opinions can be taken into account due to the investments they have made, more people will be tempted to become a part of an innovative community. In the not-so-distant future, the resultant effect is the purchase of more tokens and this, in turn, brings more activity to the decentralized application and its cryptocurrency.

✅ Grayscale Has Filed to Register Trust for Yearn Finance

In February 2021, the largest digital asset management firm globally, Grayscale, appeared in the Delaware Corporate Registry considering YFI as a future offering. At the time of writing, Grayscale has not launched a Trust in the name of the yield farming network which serves as an entry point for users to access a host of DeFi products running on the blockchain of Ethereum.

While having a Trust set up by Grayscale does not ensure the surety of the success of a digital asset, cryptocurrencies that are now associated with Grayscale experienced spikes in their prices after they were launched.

Currently, assets in Grayscale's product family are:

Aave (AAVE), Amp (AMP), Avalanche (AVAX), Algorand (ALGO), Basic Attention Token (BAT), Bitcoin (BTC), Bitcoin Cash (BCH), Cardano (ADA), Chainlink (LINK), Compound (COMP), Cosmos (ATOM), Curve (CRV), Decentraland (MANA), Ethereum (ETH), Ethereum Classic (ETC), Filecoin (FIL), Horizen (ZEN), Litecoin (LTC), Livepeer (LPT), MakerDao (MKR), Polkadot (DOT), Polygon (MATIC), Solana (SOL), Stellar Lumens (XLM), Uniswap (UNI), Yearn Finance (YFI), Zcash (ZEC).

It is a known fact that one of the drivers of a digital asset's price is a huge institutional investment. Once the largest digital asset management firm makes a huge stake for YFI, you can be assured that the cryptocurrency is poised for a run towards the $100,000 price mark.

Cons Of Buying Yearn Finance

What are the disadvantages of investing in Yearn Finance (YFI)?

Although the future of Yearn Finance looks bright due to the positives associated with it, investing in Yearn Finance based on one side of an argument can lead you to irrecoverable losses. Although the cons of investing in Yearn Finance are not many, they are extremely vital in helping guide your decisions on the cryptocurrency.

❌ Yearn Finance’s Platform Is A Bit Complicated

This is one of the most problematic areas of Yearn Finance. Many people find decentralized finance as complicated but a visit to the protocol’s platform and you’d find it very confusing. This is the main reason why founder Andre Cronje announced through his Twitter handle that a new version of Yearn.fi has been launched in June 2021. He pointed out that the new version will become more traditional finance (TradFi) friendly.

This is an admission that the platform cannot be easily navigated by users who have gotten accustomed to the user interface of traditional finance platforms.

Users who are new to the whole decentralized finance space will still find it difficult to understand how it works. This does not bode well for the novel token. This is because the name of the game in online trading and investing is, you learn by doing. If people aren’t able to feel comfortable by testing out a protocol, they wouldn’t feel safe investing in its cryptocurrency.

❌ Yearn Finance Is Not That Transparent

Aside from Andre Cronje, it is difficult to find other individuals who you can associate with Yearn Finance. It is a fact that Charles Hoskinson is widely credited as the founder of Cardano. With that said, we can all see the numerous works Cardano through one of its arms, EMURGO continues to do for developing countries in Africa and Asia.

Among crypto circles, it’s known that Jed McCaleb is the face of Stellar but we normally see updates and partnerships from the Stellar Development Foundation through representatives. The cryptocurrency digital cash (DASH) has the Dash Core Group, Dash Next, Dash Root, and Dash Investment Foundation. These groups have particular roles they play to ensure the success of the project.

Unfortunately, it is just social media platform Twitter and the flooding of information on Medium that keeps Yearn Finance enthusiasts up-to-date with the progression of the protocol. It will be awesome to get to know the representatives associated with the project. For the time being, skeptics should understand that Yearn Finance will continue to be a one-man show. Every project needs a strong team which must be disclosed. Without this, many investors could feel the project lacks a strong team to embark on innovative products that could bring them more returns.

❌ Yearn Finance Faces an Uncertain Future

We can all agree that the whole crypto space faces an uncertain future. Yearn Finance competes with one of the greatest arms of centralized finance and that is commercial banks. Cryptocurrencies seem to have had mainstream acceptance after El Salvador passed a bill to see Bitcoin used as a legal tender. In a few days after such an announcement, El Salvador sought the help of the World Bank in implementing the cryptocurrency as a legitimate tender for transactions.

The World Bank humbly rejected this request by citing concerns over the environmental impact of Bitcoin mining. Aside from this, the organization made it known that there are concerns over the transparency of the cryptocurrency. Based on Europol’s 2020 Internet Organized Crime Threat Assessment Report published in October, it was revealed that “In terms of payment options, Bitcoin remains the Darkweb’s most popular method mainly due to its wide adoption, reputation, and ease of use.”

Since altcoins which include YFI follow the price patterns of Bitcoin in bullish days and bearish seasons, if BTC keeps plunging YFI could follow.

Aside from the happenings of Bitcoin, unregulated digital assets face strong competition from regulated digital assets in the future. Since Yearn Finance is known for its yield aggregation, this means it thrives on lending in a decentralized manner to remain relevant. With more countries piloting projects on central bank digital currencies (CBDCs), the end may be nearer than expected for Yearn Finance. It is not impossible but it wouldn’t be surprising if YFI takes a major hit in the future due to the innovations that provide similar functions but it's backed by a centralized system billions of people can trust.

Yearn Finance Price Prediction: What Are Analysts Saying About Yearn Finance?

There are several price forecasts made by tens of analysts and experts who back their predictions by strong fundamental and technical analysis. Trading Education has taken the time to find authentic projections that will guide your decision on investing in Yearn Finance. Most of the predictions find answers to questions, how much will YFI be worth, Yearn Finance Price Prediction 2022, Yearn Finance Price Prediction 2025, and Yearn Finance Price Prediction 2030.

According to the experts at Digital Coin Price, Yearn Finance could trade for a coin at $14,635 by the close of 2022, $17,354 (2023), and $17,462 (2024) in the short term. In the long term, the crypto news and technical analysis portal project YFI to reach trading prices of $21,882 by the year’s end of 2025, $20,381 (2026), $25,801 (2027), $35,157 (2028) and $49,538 (2030).

According to the analysts at Coin Price Forecast, Yearn Finance could reach a trading price of $13,600 by the end of 2022, $14,555 (2023), and $13,814 (2024) in the short term. The crypto prediction portal estimates YFI to command trading prices of $17,344 (2025), $20,795 (2026), $23,838 (2027), $25,601 (2028), $25,750 (2029), $24,216 (2030), and $27,009 to close 2033.

According to CoinPedia, Yearn Finance could trade for $49,055 by the year’s end of 2022. Expert Elena R. expect YFI to command a trading price of $164,257 in the next 5 years.

Don't Miss: Yearn Finance Price Predictions

How To Invest In Yearn Finance / Where Can I Buy Yearn Finance?

Investing in Yearn Finance and other altcoins have become an important theme across several discussion boards. This is because many people are spamming social media platforms primarily Facebook, Reddit, and Twitter with links people can send money to and make huge returns. Most of them end up being shady schemes and scammers take off with a sum of money at the end of the day.

This is why we would like to recommend eToro Exchange for you. With eToro you’d feel safe investing in YFI and your coins will be stored in a secure environment. Follow the steps and buy your first Yearn Finance coins.

OPEN AN ETORO ACCOUNT. Input your full legal name, phone number, email & residential address.

VERIFY YOUR ETORO ACCOUNT. All centralized exchanges adhere to a program called Knowing Your Customer (KYC). EToro must get to know the person requesting an account with them. Therefore, requests will be made for an identification card that can confirm your credentials. Once this has been done, your account can be processed. Sometimes, eToro will request proof of address to help them confirm the billing address on your payment method through a bank or credit card statement. This helps deal with fraud and money laundering.

DEPOSIT FUNDS INTO YOUR ACCOUNT. From a range of payment options, you can deposit an amount of money you can afford to lose.

NAVIGATE TO THE YFI PAGE. On this page, you can buy one or several YFI that meet your budget. It would be processed and added to your account.

Risk Alert! Please refrain from investing in YFI or other digital assets with your entire savings. The assets are highly volatile and you can lose your investments in a few tries of calls and puts.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

The Bottom Line - Should You Buy Yearn Finance?

YES! Yearn Finance is a digital asset you should consider buying due to the enormous gains it could bring you in the future. According to CryptoCurrency Prediction, Yearn Finance is a buy because it could have a trading price of $47,657 by the end of 2022. With that said, you should know that investing in cryptocurrency comes at a cost. This is why you must consider risks and rewards. Do the potential rewards of investing in Yearn Finance exceed the potential consequences of the risks?

Yearn Finance has a complicated trading platform, it does not have enough information about the team behind the project and can suffer great plunges in the future if citizens get hooked up on central bank digital currencies. On the other hand, Yearn Finance is one of the most decentralized applications in DeFi and analysts are expecting YFI price to rise in the future. The bearish outlook of the cryptocurrency market provides a great opportunity for sophisticated and unsophisticated investors to add YFI into their portfolio of investments.