YFI is the native cryptocurrency of the Yearn.finance protocol. It is a governance token that allows users to vote on which direction they want the protocol to head.
Since its launch in July, YFI has become one of the largest Ethereum-based tokens due to the protocol's focus on automated yield farming strategies. In some ways, you could think of Yearn.finance as a robot that always tries to find the best yields in Ethereum DeFi.
INTRODUCTION
Decentralized finance – better known as DeFi – has seen parabolic growth as the yields provided by protocols have exploded higher. A crucial part of this growth can be pinned to the introduction of governance tokens, which allow holders to determine the direction they want protocols to develop. Governance tokens are a crucial step in decentralizing DeFi protocols.
Riding the wave of governance tokens, Yearn.finance rolled out YFI in July 2020. It quickly captivated the cryptocurrency space as it proceeded to rally from $3 to $30,000 in a month.
WHAT IS YEARN.FINACE?
Before we get into YFI, it's worth giving some context about Yearn.finance – also referred to as yEarn.
Launched by Andre Cronje in early 2020, Yearn.finance is an Ethereum-based protocol focused on providing its users with access to the highest yields on deposits of ether, stablecoins, and altcoins. Andre Cronje is a South African financial technology developer who was motivated to build Yearn.finance after he found inconsistencies in the yields offered by different DeFi applications.
After suffering an exploit shortly after launch, Cronje overhauled the protocol to provide users with a new suite of products.
