The cryptocurrency bull market is here and it’s time to decipher the difference between Yearn Finance (YFI) and its many forks.
In a fortnight that has been eerily similar to the first few months of 2017, leading cryptocurrency influencers, investors and even exchange owners have been touting the best way to navigate this bizarre, DeFi-fuelled bull market.
BitMEX CEO Arthur Hayes seems to have forgotten he is running a derivatives exchange that facilitates billions of Dollars worth of volume in the past few weeks, deciding to tweet out his journey in the immature yield farming sector.
“You know I love me some korean food. $KIMCHI is lit. It’s a staple of the #CHAD diet. Get on my level.” He tweeted last night alongside an image of the new Kimchi protocol, which allows users to stake Uniswap tokens to earn interest.
The concept of staking newly-formed, illiquid tokens to earn interest may seem strange to newcomers, but it’s a trend that has arguably caused Ethereum’s tremendous rally to a two-year high of $485.
I don’t think y’all heard me. 1 $YFI = $100,000. pic.twitter.com/IGirAovezB
— Arthur Hayes (@CryptoHayes) August 30, 2020
Some of the top performing erc-20 tokens have been Yearn Finance and its subsequent forks, YFII and YFV, although notable mentions also need to go out to projects like Sushi.
Yearn Finance (YFI) is a platform that lets users deposit and stake their erc-20 tokens in order to receive daily interest. It works by allocating capital to the most rewarding staking pools across the network, thus giving users the best returns.
The YFI token has risen dramatically over the past month, reaching a high of $40,000 per token despite trading well below $1,000 just two weeks ago.
Yearn Finance fork, YFII, has also enjoyed a fruitful week of price action with it rising to as high as $9,500 from a monthly close of $1,031.
Yearn Value, which has a ticket of YFV, aims to bring the true value of yield farming finance to all users via its unique set of rules including its inflation rate.
While the extraordinary gains may tempt investors to capitalise on the short-term trend, it must be noted that these projects are extremely volatile and relatively illiquid, so investors should only buy in with they can afford to lose, if at all.
This article is not intended as financial advice.
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