It is 2020, but for some reason, it feels like 2017 again. Why? It’s the YFI (no, not WiFi). Yearn Finance’s YFI token doesn’t seem to slow down. At all. The ‘absolutely no-value’ token has actually achieved a $4000 valuation and has become the second-highly priced crypto asset after Bitcoin.
YFI Becomes the Second Highest Priced Cryptocurrency
They don’t compare the cryptocurrency space to the wild-wild west of finance for nothing. Especially when you have a token like YFI, which theoretically has no value but still goes on to trade at thousands of dollars. As if the dollar has no value (sarcasm intended).
Yes, that’s right. As CryptoPotato reported earlier, YFI was up about 35,000% as of July 25. Fast forward five days, the latest DeFi ‘yield farming’ token is doing rounds around the $4000 price mark and has appreciated by almost 48,000%.
That makes it the second-highest priced cryptocurrency after Bitcoin. YFI started with $8.55 on July 17, and with a total supply of 30,000 tokens. As per data from CoinMarketCap, 29,838 YFI coins are already out in circulation.
What’s it all About?
According to DeFi Pulse, the Ethereum based crypto token is quickly rising in ranks and is currently positioned at number 9 with a 30% gain in the last 24 hours. What’s with all the gains if YFI doesn’t have any value at all?
It seems the catch is in the official announcement by creator Andre Cronje. Cronje stated seven systems that are a part of the Year Finance ecosystem – yearn.finance, ytrade.finance, yliquidate.finance, yleverage.finance, ypool.finance, yswap.exchange, *.finance.
All these systems have been managed by the development team until recently. According to Andre:
In further efforts to give up this control (mostly because we are lazy and don’t want to do it), we have released YFI, a completely valueless 0 supply token. We re-iterate, it has 0 financial value. There is no pre-mine, there is no sale, no you cannot buy it, no, it won’t be on uniswap, no, there won’t be an auction. We don’t have any of it.
The Year Finance creator goes on to say that the only way to interact with the ecosystem is by providing liquidity to one of the seven platforms and stake the output tokens in distribution contracts.
But then What About ‘Completely Valueless 0 Supply Token’?
It is important to note that every time Andre talked about YFI and mentioned the protocol’s specifications, he impressed upon the word ‘earn.’
Yearn’s staking incentive contract is on Curve, which lets folks earn y tokens. And owing to the DeFi mania, the USD total value locked, is steadily rising (almost $4 billion now).
Since there was no option to buy YFI tokens, and no-one controls the protocol (gold for ‘decentralized yield farmers’), investors went all out and staked to their heart’s content to ‘earn’ YFI.
That, in turn, resulted in an explosive rise in the token’s value. The protocol is named rightly so, as this will lead more DeFi to ‘yearn’ for YFI staking.
Currently, Yearn Finance has $130 million worth of liquidity staked in all of its systems. The token’s ‘earning value’ is exponentially rising, but will it surpass bitcoin’s price in the future? That remains to be seen.
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