Want to jump straight to how to buy Yearn.Finance (YFI)? You can buy Yearn.finance on Gemini.
Yearn.finance is the backbone of many DeFi applications, and it focuses on generating yield on your digital assets. During the DeFi boom of 2020, yearn.finance surpassed the price of Bitcoin, becoming one of the most valuable coins on the market. However, YFI has a far lower supply than Bitcoin, so it's market cap was still far lower than that of Bitcoin's. In the latter half of 2021, many DeFi altcoins have fallen, underperforming the general market. This includes YFI, which is now down over 50% from its all-time high prices. This being said, yearn.finance is an extremely interesting project, and many believe it still has future growth potential. But how exactly does Yearn.Finance work — and what makes it such a valuable token? Can Yearn.Finance recover after the crypto crash of the summer of 2022 and the continued struggles of 2023?
Our beginner’s guide to yearn.finance will help you learn a little more about yearn.finance and decide if this token is the right cryptocurrency investment for you. We’ll also show you how to buy yearn.finance and where you can store your tokens with the highest level of security.
Brief History of Yearn.Finance
Yearn.finance is an aggregator service for the emerging decentralized finance (DeFi) industry. Yearn.finance’s goal is to simplify the yield farming process for investors and maximize profits by enabling users to farm using automated processes. The Yearn.finance network takes advantage of a number of additional cryptocurrency projects (including Curve and Aave) to integrate staking services and provide services to investors who don't want to spend immense amount of time optimizing their interest rates on DeFi programs. The project generates revenue by charging withdrawal fees and investment fees as high as 5%.
Introduced in February of 2020 as iEarn, Yearn.finance has seen explosive growth after the launch of its in-house token, YFI. Since then, however, the token has fallen significantly from its all-time highs. Yearn.finance was developed by Andre Cronje, a developer with a long history in decentralized finance technology implementation. Yearn.finance is routinely one of the 100 largest cryptocurrency tokens on the market.
Yearn.Finance & Woofy Token
With the recent surge in price of doggy-themed cryptocurrencies like Shiba Inu, Dogecoin and others, Yearn.finance decided to run an experiment on token price bias. Since these dog-themed cryptocurrencies are so cheap due to their high supply, some investors wrongly believe that these tokens have more room to grow than more expensive cryptos. Some speculators of Yearn.finance argue that the high token price deters investors from buying YFI, so the platform made Woofy token.
Woofy Token and Yearn.finance are interchangeable at an exchange rate of 1:1,000,000. So, Woofy should be one-millionth of the price of YFI at any time. Due to the cheap price of Woofy, investors were drawn to investing in the token. This made both Woofy and YFI surge in price, with Yearn.finance peaking at $96,000 per coin.
Following the crypto crash of 2022, Yearn had fallen below $10,000 and has lingered between $8,000 and $9,000 per token for some time.
How to Buy Yearn.Finance
- Open an Online Account
The simplest way to buy most types of crypto is to open an account with a cryptocurrency broker that supports the tokens and coins you want to invest in. When you get started with a cryptocurrency broker, you’ll need to submit a bit of personal information so your broker can open your account. Some information your broker might ask you for may include your ID, social security number, birth date and home address.
Gemini is a great option for new investors because of its Gemini Earn program. Gemini Earn lets you earn interest on your digital assets directly on the exchange –– this makes it easy to accumulate more cryptocurrency without having to invest more cash into your account.
Though once only available on cryptocurrency exchange services like Uniswap, more and more brokers are adding Yearn.finance to their list of supported tokens. - Buy a Wallet
A cryptocurrency wallet is a computer program, mobile application or physical device that safely stores your crypto investments. Most investors choose to hold their tokens in an off-exchange wallet because it ensures that they won’t risk losing their investment if their exchange is hacked or their account is compromised.
There are 2 major types of cryptocurrency wallets:
Hardware wallets. Hardware wallets are devices that connect to your computer that you can use to store your cryptocurrency offline. Though hardware wallets are the more expensive option, they provide you with the highest possible level of security for your coins and tokens.
Software wallets. Software wallets are applications that store your cryptocurrency using a private set of keys connected to the internet. Software wallets provide less security than offline cold storage but offer a free alternative that new and smaller investors can use to keep their crypto investments safe. - Make Your Purchase
Your wallet is set up, you’ve opened your account and now you’re ready to invest in Yearn.finance and any other cryptocurrencies of your choosing. Start by opening your broker’s trading platform and checking the current market price of YFI. Don’t panic if you don’t have enough money to invest in an entire token — your broker will allow you to purchase a fraction of a token according to the amount that you’re ready to invest. Place an order using your broker’s platform and relax — your broker will fill your order according to your specifications. If your broker is unable to finish your order, they may cancel it at the end of the trading day.
Best Cryptocurrency Exchanges
Depending on your needs as an investor, the best exchange for you may differ. Some quality options include Crypto.com and Gemini. Both of these platforms have mobile apps, allowing you to choose the platform and interface you prefer.
Tips For Choosing The Right Trading Platform
There are many things to consider when opening up a crypto account to invest in digital assets. Here are some of the most important features you should look for when considering where to make an account.
Supported Coins
Before you select a broker, be sure that you take a look at the current supported coins. There are thousands of cryptocurrencies that are bought and sold every day, and a single broker cannot offer access to every option. If you want to invest in multiple cryptocurrencies, read through each broker’s list of supported assets to be sure that the choice you pick has everything you need.
Supported Payment Methods
Though most brokers now allow you to buy cryptocurrencies with direct bank transfers, credit and debit card purchases may be limited. Consider each broker’s supported payment methods before you open an account.
Fees and Commissions
Your cryptocurrency broker will typically charge a fee or commission on each transaction you place. These fees can quickly cut into your profits, especially if you plan to trade more frequently. Compare fee and commission schedules before you choose a broker and open an account.
Local Availability
Not every broker is authorized to offer accounts and services in all parts of the country. Check local availability based on your address before selecting a broker.
Best Crypto Wallets
Now that you know how to buy YFI, let’s take a look at a few of our favorite wallet options for Yearn.finance tokens.
Best Hardware Wallet: Ledger Nano S
One of the best cryptocurrency wallets, the Ledger Nano S is well-known for providing affordable and safe storage. You can connect the Ledger Nano S directly to your computer or via the Ledger Live mobile app to transfer your tokens to cold storage. After depositing your tokens, you’ll receive protection from Ledger’s isolated Secure Chip, which uses a combination of security methods to ensure that you are the only person able to access your tokens. With a price point of about $50 and support for all ERC-20 tokens, the Ledger Nano S is an easy-to-use wallet ideal for both new investors and seasoned professionals.
Best Software Wallet: Atomic Wallet
A free, multi-platform wallet, Atomic Wallet supports a very wide range of cryptocurrency coins and tokens — including everything from Bitcoin to Litecoin and from Ethereum to all ERC-20 projects. 1 of the most unique features offered by Atomic Wallet is its “Atomic Swap” functionality, which allows you to instantly exchange 60 cryptocurrency pairs. Atomic Wallet even features its own native exchange, which allows you to buy some of the most popular cryptocurrencies using your credit card. Free, fully-functional and compatible with multiple devices and operating systems, Atomic Wallet is an excellent software wallet option.
Got an eye for bug spotting? Yearn.finance is currently refining its network and offering a “bug bounty” of up to $500,000 paid out in yUSD if you can spot crucial errors in Yearn.finance’s security protocol. Learn more about the bug bounty and how you can participate here.
Trade or Sell Your Cryptocurrency
After your purchase is complete, you’ll need to decide if you want to take a short-term or long-term approach to investing. If you decide to hold your YFI tokens for more than a week, you should transfer them to your wallet as soon as possible. This ensures that you won’t lose your tokens if your broker is the victim of a hack.
If you want to become a short-term investor, you’ll strategically exchange your YFI to a stablecoin when you believe that the price is high. When you decide to take profits, you’ll cash out your YFI directly or into a stablecoin depending on the broker you choose.
Current Crypto Prices
The cryptocurrency market is constantly fluctuating in value. After the depgging of Terra and the crash of 2022, crypto has still struggled in 2023, with some tokens trying to regain value but not coming close to their previous highs.
Adding Yearn.finance to Your Portfolio
Yearn.finance is just 1 of dozens of projects emerging in the developing decentralized finance sphere. From Ethereum to Chainlink, there are many companies focusing on providing solutions to this emerging industry. Adding other investments to your portfolio can help provide you with a wider range of diversification in your portfolio.
Frequently Asked Questions
Is Yearn.Finance a good investment?
Yearn.Finance can be a good investment, provided that it can retain its value and grow.
Is crypto investing safe?
Like any investment, cryptocurrency comes with risk. However, the crypto markets tend to be a bit more volatile than other markets.
Can you make money with crypto investing?
You can make money with crypto investing, but you should invest carefully, monitor your portfolio and ensure that you only invest money you can afford to lose.
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About Sarah Horvath
Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.