Hey Everyone,
I’m sure you’ve all heard and seen the movement in the DeFi space of late. I’ve been digging into the decentralized finance space lately (DeFi) and am loving it. I know it’s been around for a while now but I hadn’t gotten to involved until recently when I found Yearn ($YFI) through a friend.
I’m a bit “late” to the game here as Yearn went from $32 a token to over $13,000 today. That sounds crazy but it’s not as unrealistic as you might think.
Yearn is an aggregator of various DeFi lending platforms and protocols. Today, most of these platforms enable people who hold crypto (BTC, ETH, etc) to lend money to other people who want to leverage their crypto to buy more.
My first taste of doing this was on Oasis which is a decentralized lending platform and exchange. I was able to lock up some ETH in a smart contract as collateral, take out 60% of that value in DAI (a stable coin pegged to USD), and use that DAI to buy more ETH. Folks do this so they can get liquidity to trade crypto without realizing capital gains.
There are a lot of lending platforms out there and Yearn makes it to provide liquidity at the best rate by automating the lending for you to the platform with the highest interest rates. For every transaction that takes place on Yearn, the Yearn network takes a 5% transaction fee. These fees are passed to $YFI holders. As of yesterday, the network was earning ~$70,000 USD/Day. With a market cap of ~$420 million and a token price of $13,000, the network has a P/E of ~16.
A P/E ratio of 16 for a high growth SaaS company would be considered pretty low by traditional standards. But this is Crypto so…
The $YFI token is also used for governance. You get access to earning rewards by staking your $YFI tokens on the government contracts and being an active participant in voting on protocol related initiatives.
There are many protocols like Yearn popping up and the market is moving at a breathtaking pace. I highly recommend you do your own research if you are considering getting involved and understand that any money you invest can go to zero for many reasons.
That said, DeFi is amazing because of the ease of access it gives the world to financial products that normally would take a big bank, lots of paperwork, and typically a net worth above $X. In DeFi, anyone with any amount of money can participate if they are willing to learn.
Here are some of the resources I’ve read to learn more about Yearn:
I read every article on the Learn Yearn website. I especially recommend reading the “bear case” post.
Discord - If you want to learn more, start lurking here and reading through all the channels. Be careful of scammers as they do infiltrate these public channels.
Telegram - Again, be careful. I haven’t been as active on telegram and have mostly been digging around the discord channel.
Github - This is the public repo for the project. It’s been audited which is a good thing! I’m not technical enough to evaluate if those auditors were good or not so proceed at your own risk.
Disclaimer * I just bought a modest amount of this token. I’m excited about the platform revenues and the ecosystem developing around it. This is not investment advice :).
In other news… we released our latest episode of Follow The White Rabbit featuring Richard Muirhead of Fabric Ventures. It was an awesome show to record and I hope you’ll check it out.
Also, I found out this weekend that we are in the Top 200 for tech podcast on Apple in several countries. In Slovenia, we’re #5 right next to The New York Times and Wired Mag!
Thanks for the support Slovenia! :)
Go down the rabbit hole with Richard Muirhead, Managing Partner of Fabric Ventures and an early Orchid supporter. A Bitcoin believer since 2013, he shares his ideas about decentralization, the token economy, and the future of privacy.
Wishing you all the best and thanks for tuning in.
-Alex