In the world of crypto, yield farming can be a high-risk and high-reward strategy. But what is Yearn finance (YFI)? This article will show you the answer.
Introduction
One of the concepts that helps people to make money from cryptocurrency trading is yield farming. This allows people who are involved in decentralised finance (DeFi) to make money.
Yield farming is the practice of staking or lending crypto assets in order to generate high returns or rewards in the form of additional cryptocurrency. In other words, it involves moving a crypto around different marketplaces in an attempt to generate a good turnover of interest.
The thing with yield farming is that it can be pretty complex, not to mention potentially expensive if you do not move your crypto to the right platform. This is where Yearn.finance comes in. The system is designed to automate the process of finding marketplaces with the best yield across DeFi platforms.
It was originally launched in early 2020, with the system’s native token, YFI, coming onto the market in the summer of that year. The coin had what is called a “fair launch”, meaning there was no kind of pre-sale or initial coin offering (ICO).
YFI price history
When YFI came onto the open market in July 2020, it was worth around $900. It did not take long before it topped $1,000, and, by the end of August, it had skyrocketed to more than $30,000. The growth did not stop there and on 12 September 2020 the token was trading at more than $40,000. There were signs of volatility, though, and the price dropped below $10,000 in early November, before recovering to close the year at $22,738.15.
Early 2021 was a real boom time for cryptocurrency as a whole – and YFI joined in the action, breaking again through the $40,000 barrier in February before settling down to trade in the $30,000-$39,000 zone in March. April was another month of growth, with the token exceeding $50,000 with an intraday high of $53,176.03 on 15 April 2021, leading to another of $57,174.35 on 19 April. There were more peaks and troughs, but in early May the coin exploded, reaching an all-time high of $93,435.53 on 12 May 2021.
The great crypto day crash of 19 May 2021 burst the bubble somewhat, though, and it closed the month at $47,020.89. The summer was a poor time for crypto and the token reached a periodic low of $24,864.90 on 20 July. August saw YFI recover as the market improved and it was consistently above $30,000 for much of the month.
However, while September started well with YFI trading at more than $40,000, bearishness in the market saw the price fall to a low of $26,659.71 on 21 September 2021.
October 2021 was a time of recovery, with YFI closing the month at $34,078.38, while November saw consistency over $30,000 at the start of the month, with a periodic high of $36,408.53 on 8 November before the market slumped due to concerns about the Omicron variant of Covid-19.
The decline was not over, and on 15 December it fell to $18,894.03 – nearly half of what it had been worth a little over a month previously. YFI then recovered to close 2021 at $32,947.72.
January 2022 saw an initial bull run, with Yearn.finance reaching $41,470.28 on 3 January, before a market slump saw it close the month at $24,806.55. February initially saw the token go up, but then it dropped to around $20,000 before market uncertainty surrounding Russia’s invasion of Ukraine saw it dip to an intraday low of $17,217.30 on 24 February.
After multiple market crashes in mid-May and mid-June, the token continued on a downward trajectory. As of 26 July 2022, there are 36,637.72 YFI in circulation out of a total supply of 36,666. Yearn finance’s market cap is $242m, making it the 110th-largest cryptocurrency by that metric.
Yearn finance prediction
First, CryptoNewsZ has a Yearn.finance price prediction for 2022 that says that the coin could reach $28,910.64. In 2023, the coin should get to $34,766.18, while there should be more growth before its advance stalls somewhat in 2024, when the YFI price should get to $35,368.05. There should be no holding back in 2025, with the price reaching $45,829.36. The bears should then come to the market in 2026, when YFI will be worth $41,683.07.
Second, PricePrediction.net argues that YFI can get to an average of $13,173.84 this year before it goes up to $18,772.15 in 2023. There will be more growth in 2024 when the coin reaches $26,749.52, and the site argues that the crypto can get to $40,799.45 in 2025 before passing $58,712.99 in 2026.
Meanwhile, LongForecast says that the coin should plummet to a closing price of $3,470 by the end of the year, then close July 2023 at $2,835 and recover slightly to hit $2,969 as the closing price for December that year. Things should recover, though, and in July 2024 it should close at $5,930 while 12 months from then the coin should close that same month at $4,418 before closing July 2026 at $6,899.
Finally, DigitalCoinPrice remains somewhat optimistic, saying that YFI should be worth an average of $8,455.92 in 2022 before going up to $9,752.28 in 2023. The site’s Yearn.finance price prediction for 2025 comes in at $12,771.09.
There will be a downturn the following year, however, with YFI falling to $11,704.32, but 2027 should see a significant recovery to $14,886.15 before it shoots up to $20,353.11 in 2028 and $26,662.53 in 2029. In 2030, YFI will reach $30,162.82, and it should continue its rise to hit an average price of $33,576.73 in 2031.
Final thoughts
To begin with, the fact is that the token was designed to be earned, rather than traded. This means that, right out of the gate, YFI was not doing what its creators wanted it to do.
Besides, while the token’s price is high, that has more to do with its scarcity than its actual value per se.
What's more, the world of yield farming is, in and of itself, a risky business. While Yearn.finance may well make things easier for people, there is not a great take-up of it compared with regular crypto trading.
As always, it pays to be careful when it comes to investing in any crypto, so make sure you do your own research before going in on YFI.
Hope this article can provide you with a better understanding about Yearn finance prediction and what is yearn finance.
