Yearn.finance (YFI) is a service that aims to simplify the intricate world of decentralized finance (DeFi) for users. It employs automation to assist users in optimizing their potential returns from yield farming. Launched in February 2020, the platform serves as an aggregator for DeFi protocols, striving to bring a competitive yield to those who stake cryptocurrency. The platform's in-house token, YFI, is earned by users through providing liquidity. Token holdings dictate governance privileges, enabling users to participate in the platform's decision-making process.

Yearn.finance operates by utilizing various custom tools to act as an aggregator for DeFi protocols. It strives to simplify DeFi activities such as yield farming for a wider user base. The platform generates revenue by imposing withdrawal fees and gas subsidization fees, which can technically be altered by consensus at any time due to its governance model. New features are continually introduced, aiming to help maintain the long-term value of the platform. Users of yearn.finance earn YFI tokens through providing liquidity.

Yearn.finance is designed for users who may not have the time or technical knowledge to delve into the increasingly intricate DeFi landscape, or who wish to optimize their returns. By acting as an aggregator for DeFi protocols, it allows users to stake their cryptocurrency and potentially receive a competitive yield. The platform also offers governance privileges to YFI token holders, enabling them to participate in decision-making processes. This makes yearn.finance a potentially useful tool for individuals, DAOs, and other protocols seeking to earn yield on their digital assets.

Yearn.finance was launched in February 2020 by Andre Cronje, who had previously departed from the iEarn project. After its launch, the platform experienced growth as new products were introduced and the in-house token YFI was released in July. The platform's situation has since changed, with assets under total value locked coming in at just over $1 billion as of the end of September 2020. Cronje, who has experience in cryptocurrency and DeFi, continues to contribute to the platform's development.

Yearn.finance functions as a smart contract protocol on the Ethereum blockchain, aggregating offerings from other DeFi protocols. This enables users to manage their cryptocurrency holdings, with the protocol automatically reallocating resources to potentially yield non-monetary benefits. Yearn.finance provides a variety of features, including Vaults, which allow users to hold an asset while potentially receiving non-monetary rewards denominated in that asset. The platform's native governance token, YFI, allows holders to propose and vote on changes to the platform. In alignment with its user-centric approach, YFI tokens are distributed among users, with no allocation for the company or its founder.

Yield farming is a strategy in the decentralized finance (DeFi) space that allows cryptocurrency holders to receive non-monetary rewards by providing liquidity to DeFi platforms. Essentially, it's a way to utilize your cryptocurrency assets, potentially receiving non-monetary rewards compared to when they are not utilized. On the Yearn platform, yield farming is automated. Yearn uses an algorithm to locate yield farming protocols that may provide optimal non-monetary rewards and suggests them to users. Upon allocating assets, Yearn issues yTokens that keep rebalancing the principal amount to optimize non-monetary rewards. This process seeks to simplify yield farming and make it more accessible to users. While striving to optimize the returns they can earn, it is important to remember that yield farming carries risks, including price volatility and potential smart contract vulnerabilities.

The platform employs automated strategies to move users' transferred assets across different DeFi protocols, with the aim to enhance non-monetary benefits. This process involves the automated claiming and selling of tokens earned through yield-generating activities. Yearn.Finance's vaults are designed to distribute gas costs among all participants, thereby improving resource utilization. They also aim to automatically rebalance the deployed strategies to adapt to changing market conditions and yield opportunities. The platform's range of features includes routines for accumulating benefits and hedging crypto assets in decentralized products such as stablecoins and lending services.

The YFI token has a key role in the Yearn.Finance ecosystem. As the native ERC-20 token of the platform, it incentivizes users who lock their crypto tokens in Yearn.Finance contracts. The YFI token aims to provide holders with the opportunity to participate in the platform's governance. This means that YFI holders have the potential to propose and vote on changes to the Yearn.Finance protocol, with the intention of contributing to its development and future direction. The platform's governance model is designed to be decentralized, with all decisions made through a democratic voting process involving YFI token holders. Users may receive non-monetary rewards proportional to their YFI holdings, which further integrates the token into the platform's operations.

Yearn.finance employs several strategies to optimize non-monetary benefits for its users. One of the primary strategies is the use of automated yield farming strategies. These strategies aim to automatically move users' funds between different DeFi protocols to optimize non-monetary benefits. Yearn.finance also uses a strategy called "Vaults" where funds are pooled together and collectively used in yield farming strategies, which can potentially lead to greater non-monetary benefits due to economies of scale. Another aspect of Yearn.finance's strategy is the use of its native token, YFI, for governance and for receiving non-financial incentives. Users who hold and stake YFI may receive a portion of the non-financial incentives generated by the Yearn.finance platform. Another aspect of Yearn.finance's strategy is to optimize non-monetary benefits through its partnerships and integrations with other DeFi platforms, which may provide additional non-monetary benefits.

The protocols of Yearn.Finance are overseen by developers who aim to act in line with governance proposals. This decentralized governance model seeks to uphold transparency and accountability. Yearn.Finance utilizes smart contracts to automate its operations, which may reduce the risk of human error and fraud. These smart contracts are written in the Solidity programming language and are transparent, allowing users with knowledge of this language to verify the code for each vault and strategy. However, Yearn.Finance acknowledges that DeFi involves risk.

Yearn.Finance's services, like many DeFi platforms, come with a variety of risks. On the lending side, there's the risk of governance changes that could adversely affect the lending protocol, such as changes to the interest rate model. There's also the risk of smart contract failures, low demand for borrowing the asset leading to low lending incentives, and the potential for lent assets to become unavailable due to high utilization ratios. Liquidity mining, another service offered by Yearn.Finance, carries risks such as governance changes, smart contract failures, and market risks like a fall in the price of the token being farmed. Trading fees, accrued through Automated Market Makers (AMMs), carry risks such as governance changes, smart contract failures, and market risks like reduced trading volumes leading to reduced incentives. Lastly, the use of leverage in Yearn.Finance's services may potentially lead to risks such as governance changes, smart contract failures, and market risks like the possibility of debt being liquidated due to a price fall. Users are encouraged to familiarize themselves with these potential risks when considering engagement with Yearn.Finance's services.

Yearn.finance operates under a decentralized governance model, managed by constrained delegation. This model is designed with the intention of facilitating protocol development. The governance structure is composed of YFI token holders, yTeams, and the Multisig. YFI token holders vote for changes to the protocol or the governance structure. yTeams focus on specific aspects of the protocol or relevant operations, and Multisig members execute or veto any on-chain decisions. Token holders participate in determining the existence of yTeams, who is part of the Multisig, and the limitations of each group's operational control. The governance process typically involves YFI holders creating, destroying, and defining limitations of yTeams, yTeam notifying yTx of a decision, yTx creating a delegated transaction and sending it to the Multisig, and the Multisig executing or vetoing the transaction. This governance model is designed with the intention of facilitating decision-making processes within the Yearn community.

Vaults in the Yearn ecosystem, referred to as yVaults, serve as a component that aims to provide automated yield generation for various crypto assets. Each yVault is driven by one or more strategies, which are essentially algorithms that aim to optimize the potential of the assets deposited into the vault. When a user deposits a token into a yVault, they receive a yVault token (yvToken) in return, which represents their share of the vault. The yVault may have multiple active strategies at the same time and can change its strategies capital allocation when necessary. The yVault design is open-ended, allowing other protocols to build and innovate on top of Yearn. Strategists, who are individuals that build the underlying strategies for yVaults, receive non-financial incentives based on the strategy’s performance. The yVaults and their strategies are designed to operate in a manner that aims to be efficient and advantageous for the user, making them a significant part of the Yearn ecosystem.

Yearn.Finance, a decentralized finance (DeFi) protocol, addresses concerns related to gas fees on the Ethereum network by implementing automated smart contract algorithms. These algorithms shift assets between different Ethereum lending protocols, such as AAVE, dYdX, and Compound, striving to achieve optimal outcomes. This process, known as yield farming, is automated by Yearn.Finance, potentially reducing the frequency of manual asset transfers and individual gas fee payments for each transaction. Moreover, Yearn.Finance's Vaults product aggregates user contributions that are managed by automated strategies. This aggregation of contributions may potentially influence the gas fees for the pool, as a single account handles fees, instead of each individual user. However, it's important to note that while Yearn.Finance seeks to influence gas fees, the fees may still be noticeable during periods of high network activity.