Since yearn.finance introduced the revenue aggregator concept to the market in July 2020, it has attracted a large number of users in just 4 months. As of the end of September, the amount of locked positions increased by 9,712% compared to the beginning of July. The price of governance token YFI once surpassed Bitcoin, reaching $43,337 in mid-September, making it the most expensive digital asset.
What is yield farming: Due to the existence of multiple liquid mining pools, the mining efficiency of users transferring assets by themselves is inefficient and it is difficult to maximize revenue. Users can give all kinds of deposit certificates to yearn, which is responsible for automatically helping users transfer various assets in the liquidity pool to maximize returns. The process of helping users automatically transfer assets is income farming.
Since agreements such as MakerDAO and Aave allow users to lend DAI to participate in profitable farming, the demand for DAI also surged in the third quarter.
DAI’s outstanding debt increased from USD 540 million at the beginning of July to USD 2.55 billion at the end of October, an increase of 370%. With the emergence of yearn.finance income farming in July, the average proportion climbed to 77% in July and 82% in August.
yearn.finance started by allowing users to deposit two types of notes, Balancer’s BPT and Curve’s yCRV, into its management page to earn yearn.finance’s native governance token YFI. Since users can not only enjoy the income brought by each DEX through circulation mining, but also enjoy the income brought by the deposit of bills into the aggregator, and the double income can also be recycled mining, so since the release, the income of farming It was detonated.
According to data from TokenInsight’s “DeFi Industry Research Report 2020”, the lock-up volume of yearn.finance surged in mid-August and reached a peak in early September (nearly $1 billion). As of the end of September, the lock-up volume increased by 9,712% compared to the end of July. And its governance token YFI also reached its peak in mid-September at $43,337, which was 4.14 times the price of Bitcoin during the same period.
The rapid growth of DeFi in the third quarter is inseparable from the contribution of income farming. As far as the lending sector is concerned, the Lego attributes of DeFi are very obvious. According to TokenInsight’s report, when the proportion of borrowings in the third quarter fluctuates several times, the lock-up volume of the aggregator yearn.finance also fluctuates accordingly. The development of the loan agreement in this quarter is closely related to the liquidity mining launched by each DEX and the emergence of yearn.finance.
DAI is still the most demanded stablecoin in the DeFi field, and its position is very stable especially under the stimulation of income farming. The lock-up volume of revenue aggregator yearn.finance nearly doubled by the end of the quarter. It can also be seen that the Lego attributes of DeFi will have a two-way stimulus effect. In addition to increasing the demand for stable currency, users are more willing to use aggregator products because of the time and gas cost savings. The success of yearn caused market turmoil, and new players emerged one after another, and even the project itself kept making new attempts (YFII and YFIII).
dForce founder Yang Mindao said: “DeFi’s market boom this time is different from that in 2017. DeFi is really available. Whether it is aggregating yield or aggregating transactions, users can actually experience the benefits. In the future, DeFi The ecology will form a mutually reinforcing network effect of asset agreements, transaction agreements, and lending agreements.”
