Yearn Finance ecosystem

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In addition to the main yearn.finance application, the ecosystem also includes protocols:

yinsure.finance is an insurance protocol that works in conjunction with another insurance protocol, Nexus Mutual. Unlike Nexus Mutual, yinsure does not require KYC verification. It consists of two repositories and a management platform. The first vault contains the funds from which insurance will be paid and only supports USDC staplecoins. Users lock USDC in it and receive yiUSDC in exchange. yiTokens of the yinsure.finance protocol is the yTokens analogue of the yearn.finance protocol. The protocol pays introductory and weekly premiums to insurance providers at the expense of those who insure their assets.

The second repository contains the funds that users insure. You can choose from a list of protocols in whose smart contract you have funds. By November 2020, the vault supports 11 protocols, including Uniswap, Compound and Synthetix. Stablecoins DAI and cryptocurrency ETH can be insured. For example, you block in yinsure DAI for the amount you want to insure and in exchange you receive yiDAI. The entry fee is 0.1% and the weekly insurance premium is also 0.1%. If unforeseen circumstances happen to the selected protocol, like hacking or a bug in the code, yinsure will pay you the insured amount. You can terminate the insurance at any time – to do this you need to return the yiDAI.

The management platform yinsure.finance holds votes for the provision of insurance. You need yiUSDC tokens to participate. The voting process takes place over a period of 3 days. The insurance needs 33% of the votes to be approved. If 25% of all yiUSDC holders veto the insurance, the protocol will not approve it.

ygov.finance is Yearn’s ecosystem management platform. It can be used to vote for changes to the ecosystem.

Some of Yearn’s ecosystem products are in the testing phase. The smart contracts of these protocols have not yet been audited. The code is being tested, so developers warn against using these products before release. During testing, the protocols are suitable for evaluation purposes only. Projects that are in the testing phase:

yBorrow is a protocol by which loans can be granted and taken out. These loans are secured by collateral. Unlike peers, with yBorrow the collateral can be less than 100% of the loan amount. This feature is possible due to the use of the storage system and the Aave project’s liquidity pool as the basis for the protocol.

ySwap is a decentralized exchange. Its peculiarity is that users can provide liquidity using only one token. On most similar exchanges, such as Uniswap, liquidity can only be supplied by a pair of two coins.

yTrade is a decentralised exchange for trading with up to 1000x leverage. In order to get leverage, you need to provide collateral in one of the four stabelcoins: DAI of MakerDAO project, USDC of Centre consortium, USDT of Tether, BUSD of Binance.

yLiquidate is a protocol that interfaces with the Flash Loans technology of the Aave project. With the help of this technology, it is possible to borrow without collateral. To do so, you need to write a smart contract that will, in one Ethereum transaction, request a loan, act on that loan, and return the funds. If there is no refund with interest, then the technology will not execute the smart contract.

Conclusion

Yearn Finance is an ecosystem of multiple protocols. The yearn.finance protocol tracks the return percentages from DeFi projects’ liquidity pools and moves the stabilecoins to where the interest is higher. The developers then created a repository system. They take into account not only yield percentages, but also the value of the managing tokens, which are distributed to liquidity providers.

Yearn Finance has its own management token, YFI, which can be used to vote for changes to the protocol. The value of the token peaked at $40000 in September 2020.

Yearn Finance’s ecosystem includes, in addition to the main protocol:

insurance platform yinsure.finance;
the decentralised exchanges ySwap and yTrade;
a protocol for voting for changes to the ecosystem ygov.finance;
yLiquidate, a protocol that uses Flash Loans technology in conjunction with the Aave project;
yBorrow loan protocol.