Yield Farming and YFValue

What is yield farming?

Yield farming is quite of a buzz word these days and many people don’t know what it is. If you do, you can jump to the next section.

For those who don’t know it. Yield farming is the process of providing liquidity to a smart contract liquidity pool and getting paid in return for doing so. Payment form is sometimes in the native governance token and/or in the coins you are providing liquidity with. These liquidity pools are controlled and governed by a smart contract. These liquidity pools are used by decentralized exchanges like Uniswap, balancer and 1inch. These DEXs have trading fees and those fees are passed onto the liquidity providers like you and me. On top of that, these protocols like YFI, Curve Finance and YFValue give out their native governance tokens as an incentive.

Risks

Of course, with everything in the world there are risks involved in yield farming. So, let’s explore them.

1- Smart contract code issue. This happens usually on smart contracts that aren’t audited by legit firms. Developers leave a backdoor for themselves to drain the contract once it has some deposits. The best way to avoid this is to invest in projects that have their contracts audited.

2- Impermeant loss. This occurs when one of the coins that you are providing liquidity changes a lot in value. If you join a 50–50 WETH/USDT pool and Bitcoin dumps 10%, in order to keep your 50–50 ratio unaffected, your underlying asset unit number may change. You will see 10% less USDT than you have initially deposited and you will see 10% more WETH in your balance.

Now that we have gotten the boring stuff out of the way, let’s look at one of the most promising yield farming DeFi projects in the space. It is YFValue.

YFValue

YFV is a fork of YFI. However, it is quite different than YFI. It has the same basics like liquidity pools for stable coins. On top, it offers compatibility with balancer pools, offers liquidity pools with alt coins as well as staking of their native YFV tokens for some pretty decent return. It also has other unique features like coin burn on chain, voting on chain and elastic supply based stable coins. You can find about them more on this link HERE

The project is only 10 days old. However, it has $322 Million locked in the protocol. If we look at DeFi pulse, we can see that it places them on the 9th spot for locked USD value. They aren’t listed on DeFi pulse yet because they are relatively a new project. Once they are listed, we expect the price to skyrocket.

There is a huge potential for YFValue because of the reasons listed below

The smart contract has recently been audited.

They are about to release staking for YFV coin which will lower the circulating supply and create demand for farming the coin.

Current rates of providing liquidity is extremely lucrative as the pools are relatively new with fewer participants.

Compared to its competitors like YFI and Curve Finance, YFValue offers more products and more value while being less saturated.

Overall, we believe that this project will do extremely well in the long run and it has a HUGE potential to get in top 50.

If you want to save on gas fees, please use the following link to get started with YFValue HERE

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