You missed Yearn in 2020? Don’t miss Yearn Classic in 2021
As decentralized finance (DeFi) took the spotlight in the summer of 2020, one protocol in particular has blown past all expectations: Yearn.Finance. Yearn.Finance’s governance token YFI went from launching on July 17, 2020 at approximately $30 to over $40,000 within less than two months, reaching a market capitalization of over $1.3 billion. While such price action has captured the attention of many, so have its products and its passionate community.
Yearn’s Astronomic Growth
Within less than two months of YFI’s launch, Yearn had already established itself as one of the leaders of DeFi. In terms of price performance, YFI had gone up 1000x a week after launching. On August 19 2020, YFI also became hot topic as its price flippened the price of Bitcoin, effectively becoming the most expensive cryptocurrency. While some find this impressive, it is not nearly as extraordinary when you consider its low supply of only 30,000 YFI. If YFI had Bitcoin’s circulating supply, one YFI would cost approximately $54 at a market cap of $1 billion.
YFI’s on-chain activity better represents just how explosive its growth has been. On August 20 2020, YFI surpassed $500 million in on-chain transactions volume. This is just the volume recorded on the Ethereum blockchain; total YFI volume should be significantly larger due to off-chain centralized exchanges.
Yearn vs Yearn Classic
Yearn was initially introduced a a Defi protocol that would not exceed the initial total supply of 30,000 YFI that policy protects initial investors but later on, Yearn minted 1000 YFI to reward core Devs, a decision much contested by new buyers and holders who lost a substantial amounts of well-deserved value. This turned Yearn into an inflationary defi protocol withFrom it’s initial total supply of 30,000 YFI, Yearn has a total supply of 36,666 YFI which tends to gradually increase overtime, hurting the profits of early investors. This was possible because the initial Yearn token has a mint function which allows Devs to mint more token through a so called governance protocol. Yearn.finance holders should not be surprised to see a 1,000,000 YFI amount of circulating Yearn.finance supply soon because it is absolutely possible from a technical point of view. Among Yearn.finance issues it is good to know that the choice of the Ethereum blockchain is not the best option in 2021 as Ethereum transactions require relatively high gas fees to transact. In the other hand Yearn Classic’s Development team deleted the minting function which means no additional amount of Yearn Classic(YFC) can ever be minted. This choice protects the holders from inflation and arbitrary loss of value. Yearn classic also redistribute a 3% of all transactions to existing holders and 2% is added to the liquidity pool. Yearn classic operates on the Binance smart chain(BSC) blockchain which means insignificant transaction fees for block confirmation thus anybody is allowed to become a Yearn Classic holder with as low as $30 worth of BNB Tokens. Yearn classic also offers convenience of trade because it is listed on Binance’s Pancakeswap decentralized exchange(Yearn Classic on Pancakeswap). In other words Yearn Classic presents itself as the Robin Hood of the Decentralized Finance community by making Yearn Great Again for the profit of it’s holders.
Some early Yearn code analysts and enthusiasts who disapprove the idea of the suddenly appearing whales through arbitrary(So called governance) minting function deployed the Yearn Classic protocol on bsc which is designed to follow the original Yearn plan of non inflationary protocol.
The Yearn.finance capital gain opportunity was mostly seized by then(Summer 2020) DeFi enthousiast in a bear market when Bitcoin was worth about 10,000 USD. In 2021, the context is different the market is bullish and the potential for growth is higher as DeFi has become a mainstream tool and Bitcoin is back above $40,000 USD(As of june 2021) after a short dip that happened in May 2021 and Yearn Classic may be the answer to “what is the best DeFi investment in 2021”.
Jack Smith
Crypto-Analyst who predicted Doge growth back in 2016
Editor
Blockchain Morning Post
