The DeFi race continues to heat up as the Ethereum-based governance token YFI hit an all-time high of $4,664
The YFI token seems to have caught fire in the midst of the DeFi craze due to its lucrative annual interest possibilities. In a very short time, it rose as much as 11,000%.
The token is a part of the Yearn.finance ecosystem, and the markets appear to be receptive to the project.
In a July 17th Medium post, Andre Cronje launched Yearn.finance and described all the DeFi services that the platform will be offering:
- ytrade.finance (yet to be launched)
- yliquidate.finance
- yleverage.finance
- ypool.finance
- yswap.exchange
- *.finance (yet to be launched)
The platform comes with its native governance token YFI, which was released at $0 without any option to purchase or to pre-mine. The only way to get YFI is to invest in one of the platforms listed above.
Cronje expanded on the system,
“Earning YFI is simple, provides liquidity to one of the platforms above, stakes the output tokens in the distribution contracts (we will provide an interface for this), and you will earn a (governance controlled) amount per day.”
He ended the press release with, “Don’t buy it. Earn it.”
An amazing rally
Within a day of its release, the token saw a 2,000% spike in value as investors fell over each other to buy the new asset. These kinds of buying patterns can lead to big falls in price, which appears to be happening.
However, there were incentives for buying, since investors were promised a 1,000% annual return through its incentive program, causing mass hysteria in the DeFi community.
The YFI token started with no value and grew exponentially. At the time of writing its all-time high stands at $4,661.97 according to Coingecko — but it is currently valued at $3.146.50, far below its peak price.
Yield farming is a new space
Yield farming is the recent price driver in the DeFi community.
The yield farming business model is essentially putting idling crypto into work in return for generous interest rates. The Compound token sparked the DeFi craze, driving the value locked in Ethereum DeFi platforms up to a record $2 billion.
In a recent interview, Vitalik Buterin, the co-founder of Ethereum, voiced his concerns about yield farming; Buterin believes that at the current interest rate, yield farming is highly unsustainable, and sooner or later, these interest rates will converge with the interest rates of traditional financial institutions.
https://coinjournal.net/news/newly-released-yfi-token-sees-11000-growth-is-this-sustainable/
