What Is Yearn.finance?

Yearn is a set of protocols that run on the Ethereum blockchain

Founded by Andre Cronje, Yearn is a set of protocols that run on the Ethereum blockchain, which is different from Bitcoin’s. Bitcoin’s blockchain aims to decentralize products and services other than crypto. This means that Ethereum’s blockchain is not only focused on the digital gold (cryptocurrency), but it also allows users to create assets along with their respective programs to govern them.

To put it simply, Bitcoin’s blockchain is a special-use tool, much like a wallet, that is capable of containing cryptocurrencies. On the other hand, Ethereum’s blockchain is more akin to a web browser since it enables users to create and interact with the program.

Since it runs on the Ethereum blockchain, yearn is not only limited to digital coins, specifically yTokens, but it also opens the opportunity for users to earn more cryptocurrency via trading and lending.

Moreover, yearn is a collection of DeFi (Decentralized Finance) products, like Aave, bZx, Nexo, Compounds, and more. Users can benefit from yearn.finance since it gives them the opportunity to lend their products, shows a possible projection of their profit, and offers insurance to users.

How Yearn.finance Works

To understand how yearn.finance works, it’s important to understand the five independent products contained in it:

  • Earn: Yearn’s lending aggregator that automatically shifts DeFi products, like Aave, dYdX, bZx, Compound, and more. If the interest rate of a specific product suddenly changes, then Earn shifts them. This means that users will get to enjoy the best rates, providing more opportunities for income.
  • APY: In connection with Earn, APY (Annual Percentage Yield) provides users an estimate concerning the interest they have earned.
  • Zap: Allows users to trade various products in the Ethereum blockchain like BUSD, USDC, USDT, DAI, and TUSD, in a single click, saving users time and labor.
  • Vault: This contains pools of investment strategies that aim to generate returns from DeFi products. It helps users by automating their capital and their yield.
  • Cover: Serves as a kind of financial insurance that users get in case there is a problem in the Ethereum network. Because of this, users are assured that their investments are well protected.

How Can You Make Money via Yearn?

Essentially, one can earn money via yearn.finance through interests. To illustrate, when an investor deposits money in a DeFi product, yearn.finance will find the one that has the highest interest among the blockchain.

Supposed that it is Aave, then the tokens would automatically transfer to Aave. If the interest of Aave suddenly drops, then it will transfer again to another DeFi product. This automation allows users to conveniently earn interest.


If you are the type of person who wants to earn interest from your DeFi products without the hassle of having a custodian or intermediary, then yearn.finance is definitely worth considering. Also, investing in YFI tokens can be a great way of diversifying your investment portfolio.

So, if you believe that Yearn will continue to grow along with various DeFi products, as projected by crypto experts, then it may be worth it to invest some of your hard-earned money on this platform.

Opinion writer on 7trade7