Yearn.Finance is a crypto project that provides access to yield farming via the Ethereum DeFi ecosystem. The platform's native token - YFI, has since become one of the hottest digital assets in the decentralized Finance market.
This revolutionary project is widely considered to be one of the best ways of achieving a secure and direct investment into the DeFi landscape. With this in mind, in this guide - we will explore how you can make money by investing in Yearn.Finance.
By the end of this How to Invest in Yearn.Finance Guide, you will have a full understanding of what to consider when buying this digital token and how you can find the right online broker to facilitate your YFI investments.
- How to Invest in Yearn.Finance in 5 Easy Steps
- How Does the Invest in Yearn.Finance Process Work?
- Why Should you Invest in Yearn.Finance?
- How to Invest in Yearn.Finance - Various Options Available
- How to Choose a Platform to Invest in Yearn.Finance
- How to Invest in Yearn.Finance Today - Step-by-Step Walkthrough
- The Bottom Line
How to Invest in Yearn.Finance in 5 Easy Steps
There are several ways to approach cryptocurrency investing. However, for beginners - the easiest and most convenient method would be to choose a regulated crypto broker that supports Yearn.Finance.
If you want to know how to invest in Yearn.Finance right now, follow the five simple steps outlined below.
Step 1: Open an account with a regulated cryptocurrency exchange
Step 2: Deposit funds.
Step 3: Find Yearn.Finance from the list of digital tokens available on the platform.
Step 4: Enter the specific amount you want to invest in Yearn.Finance.
Step 5: When your purchase of YFI tokens is complete, you can withdraw them to a secure digital wallet.
End-to-end, the above steps should take you no more than 5 minutes to complete. As such, the process of how to invest in Yearn.Finance at eToro could not be simpler!
As an investor, you will continue storing your YFI tokens in your private wallet until you find the right time to sell them and profit from your investment.
If you choose a regulated broker like eToro, you won't even have to withdraw your Yearn.Finance coins. Instead, the platform offers an in-built wallet service where you can safely store your YFI tokens in a secure and hands-off way.
How Does the Invest in Yearn.Finance Process Work?
As with any other investment, when you invest in Yearn.Finance, your goal is to profit from it. However, in order to successfully do that - you need to be aware of what factors can affect the value of your digital currency holdings.
Being a cryptocurrency, Yearn.Finance tokens are inherently volatile. The price of these coins keeps changing from one second to another - driven by the supply and demand in the market.
In simple terms, when there are more investors seeking to buy Yearn.Finance than sell it, the demand for the coin increases in the market - and so does its price. If the inverse happens, there will be more supply, and the value of YFI will go down.
When considering how to invest in Yearn.Finance you are hoping that the value of YFI tokens will increase in the future so that you can cash out at a profit.
Here is a practical example of how a Yearn.Finance investment works:
- Let's say that you intend to invest $5,000 in Yearn.Finance.
- When you are looking to invest, the price of each Yearn.Finance token is $31,000.
- Over the course of two years, the value of Yearn.Finance increases to $50,000.
- Pleased with this price, you decide to sell your YFI tokens at $50,000 per coin.
- Thus, on your $5,000 investment, you make a profit of $3,050 - translating to a 61% gain.
The key takeaway here is that you were able to make profits only because the price of Yearn.Finance increased since you made your investment. If the value of YFI tokens had gone down, you would be facing losses instead.
This is particularly important in the case of cryptocurrencies - where prices can change drastically overnight.
This is why it is paramount that you carefully consider the risk factors before investing your money into crypto assets like Yearn.Finance
Why Should you Invest in Yearn.Finance?
Before considering how to invest in Yearn.Finance, you should be able to answer why you should put your capital into this digital asset.
For that, first, you need to take a look into the broader potential of the Yearn.Finance protocol.
Therefore, In this section of our How to Invest in Yearn.Finance Guide, we will discuss some of the reasons why you might decide that this asset is a worthwhile addition to your financial portfolio.
Yearn.Finance Has a Limited Supply
One factor that is particularly in favour of investors is that Yearn.Finance has a significantly low supply.
In fact, there are a total of just 36,666 YFI tokens available for purchase. This scarcity component gives it an edge that is not commonly seen among other DeFi projects. Besides this limited supply, the protocol also follows a fair token distribution - perhaps one of the fairest in the crypto market since the launch of Bitcoin.
Crucially, YFI tokens were not pre-mined, nor were there any VC investors who were able to pick up the coins at a discounted rate. Therefore, as the years pass by, this can help lead to a higher price value - given that the Yearn.Finance protocol continues to perform well.
Yearn.Finance Has Multiple Products
There is a reason why Yearn.Finance is so popular among DeFi users and investors. The platform allows you to earn in numerous ways from your crypto holdings. For instance, there are ‘yVaults’, which allows you to develop and use yield farming bots that support multiple cryptocurrencies.
In addition, the platform gives you the opportunity to earn on your crypto assets by contributing to the lending aggregator. There are also other innovative products such as Zap, yInsure, and YTrade that cater to different utilities - such as moving assets between different yield-bearing pools and trading digital tokens.
Compared to other crypto assets in the market - which often have no use cases at all, Yearn.Finance certainly has an upper hand when it comes to real-world value.
Yearn.Finance is Continuously Expanding
Although Yearn.Finance already packs several unique features, the platform is still looking to expand by looping in other exciting projects. It has integrated with Pickle to create new vaults and strategies in order to improve security.
In late 2020, Yearn.Finance also partnered with C.R.E.A.M to offer leveraged yields to its users - another unique selling point of this platform. It is also working with Cover, Akropolis, and Sushiswap to fine-tune its products and expand the functionality of its network.
Altogether, Yearn.Finance has established itself as a well-integrated protocol with tie-ups alongside other popular projects in the crypto sector. This points to a promising future for this DeFi platform.
Yearn.Finance Tokens Gives you Voting Rights
Considering all these factors, Yearn.Finance is one of the many DeFi platforms that has the potential to continue growing in the coming years. Therefore, gaining voting rights for this protocol can be a significant advantage for investors.
Owing Yearn.Finance tokens allow you to vote on project decisions. These are called YIPs or Yearn.Finance Improvement Protocols. As it goes, the more YFI coins you hold, the more say you will have in the future direction of the network.
Additionally, you can also stake your Yearn.Finance coins, which will give you voting rights as well as passive income. However, the rewards you earn can be claimed only within three days after you take part in the respective vote.
Given how fast Yearn.Finance is growing, these factors will continue to be relevant for anyone who is thinking about investing in this digital asset.
With that said, we encourage you to explore other aspects that can influence the price of YFI tokens before you invest your money into them.
Read Also: Pros and Cons of Investing in Yearn Finance
How to Invest in Yearn.Finance - Various Options Available
Now that we have covered some of the most important things you should know before investing in Yearn.Finance, let us look at how you can gain access to this exciting digital token.
Today, cryptocurrency investing has become so easy and simple that you can complete the process in a few clicks. However, you should carefully consider your options as each one differs in terms of security and convenience.
Over the years, cryptocurrency exchanges have emerged as the go-to option for crypto trading and investing. For beginners, these platforms might strike as the easiest option when thinking about how to invest in Yearn.Finance.
Undoubtedly, cryptocurrency exchanges offer easy access to digital assets like Yearn.Finance. However, not many know that such platforms largely tend to be unregulated. In other terms, there is no financial authority that governs the operations of these providers - which will add more risk to your investments.
In addition, if you want to buy Yearn.Finance coins for investment purposes, you might have to exchange them from another cryptocurrency. This can be a challenge for investors, especially if you are a beginner who does not hold any other digital asset.
Furthermore, depending on your chosen exchange - you might also have to withdraw your Yearn.Finance tokens in order to store them safely for the long term. Finally, when you wish to sell your investment, you will have to move your coins back to the platform and swap them for another cryptocurrency.
All in all, when you take a closer look, investing in Yearn.Finance via a cryptocurrency exchange can be a prolonged and trying process.
Alternatively, you can also consider an online broker to facilitate your Yearn.Finance investments. Even the most novice investors are sure to have heard of brokerage platforms. Apart from providing access to stocks, commodities, and forex, you can find those that offer support for cryptocurrencies too.
The main reason we prefer brokers for investing in Yearn.Finance is because of the security aspect. Among brokerage platforms, you can find regulated providers that hold licenses from reputable financial authorities.
This means that the broker will always be monitored by the respective governing bodies - and thus, you can invest in YFI tokens safely.
Moreover, regulated brokers like eToro also allow you to buy Yearn.Finance coins directly by funding your account using fiat currency - such as US dollars or euros. As such, you will not have to exchange another cryptocurrency to get your hands on YFI tokens.
In addition, with brokers such as eToro - you also have the option to securely store your digital assets in the in-built wallet provided by the platform. This will remove any need for you to withdraw your Yearn.Finance coins or transfer them when you want to cash out.
Instead, you can sell them directly from your investment portfolio on the brokerage website itself.
As you can see, regulated brokers like eToro come out miles ahead when compared to unlicensed cryptocurrency exchanges.
How to Choose a Platform to Invest in Yearn.Finance
Now you know why regulated crypto brokers are the best way for you to invest in Yearn.Finance safely and conveniently. However, there are dozens of brokerage platforms eager for your business.
For the untrained eyes of a beginner investor, it can be a challenge to figure out which ones are the most suited for making Yearn.Finance investments.
Therefore, in this section of our How to Invest in Yearn.Finance Guide, we will tell you about some important metrics that matter the most to crypto traders.
Licensing and Reputation
Like we discussed earlier, regulation is one of the most crucial characteristics when it comes to a trustworthy broker. Therefore, when you visit a brokerage site, make sure to check if it holds any valid licenses.
That said, let us tell you why regulation is important in the cryptocurrency investment markets.
In a nutshell, being licensed by a respectable authority compels the broker to adhere to the guidelines and standards set by the respective governing bodies.
- Storing your capital separate from the funds of the broker.
- Verifying the identity of all registered users.
- Submitting records for regular auditing.
- Being transparent and displaying the risk warnings associated with cryptocurrency investments.
All in all, these regulations are designed to serve your best interests and add to the safety of your YFI investments.
Additionally, you can also find brokers that are licensed by more than one financial authority - like eToro. This platform is regulated by the FCA in the UK, ASIC in Australia, and CySEC in Cyprus.
In addition, the brokerage is also registered with the SEC and FINRA to cater to residents of the US.
As such, you can confidently invest in Yearn.Finance via eToro, knowing that your investments will always be secure under the protection of multiple governing bodies.
Fees to Invest in Yearn.Finance
You will also need to evaluate online brokers based on the fees they charge. In order to make Yearn.Finance investments, most likely, you will be most required to pay a commission.
The commission rates will never be the same on two different platforms. This will be represented in terms of a percentage - calculated based on the size of your investment.
- For example, suppose you want to invest $1,000 into Yearn.Finance and your broker charges you a fee of 4%.
- This means that you will be forced to pay $40 in commission to your broker when you make the investment.
On top of that, many beginners tend to forget that this commission will be applicable when you cash out your YFI tokens too. This means if the value of your Yearn.Finance investment increases to $10,000 when you are selling - this will cost you a fee of $400.
As you can imagine, such a high commission can directly influence how much profit you will be able to keep for yourself. With that being said, regulated broker eToro allows you to invest in Yearn.Finance without having to pay any such fees at all.
Nevertheless, you should also check whether your chosen broker charges you to process deposits and withdrawals on the platform. For instance, at popular cryptocurrency exchange Coinmama, a debit card transaction will cost you 5% - which is on top of its 3.90% buy commission!
In comparison, on eToro, all payments are processed for free unless you are funding your account in a currency other than USD. In this case, it will cost you a fee of just 0.5%.
Minimum Yearn.Finance Investment and Payments
The amount of money required to buy a cryptocurrency will typically depend on the price of your chosen asset. In the case of Yearn.Finance, this is on the higher end of the scale.
The value of a single YFI token at the time of writing stands at over $31,000. For most retail investors, this might make Yearn.Finance an unattainable digital coin.
However, the good news is that many brokers allow you to start investing in Yearn.Finance with smaller amounts - as long as you meet the minimum investment requirements set by the platform.
For instance, eToro opens the way for you to invest in Yearn.Finance from just $25. At the price mentioned above, investing this amount will get you approximately 0.00079 YFI coins. The point is that eToro allows you to gain access to Yearn.Finance without having to risk large sums - subsequently reducing your exposure.
As such, preferably, you want to find an online broker like eToro that enables you to invest in Yearn.Finance via fractional amounts.
While on the subject of investment amounts, you should also take into account how you can fund your brokerage account. Many brokers support a number of popular payment methods - ranging from a traditional bank transfer to e-wallet providers like PayPal.
On regulated brokers like eToro, you will also be able to pay for your Yearn.Finance investments using a debit card or credit card - which is also the most convenient payment option.
When considering how to invest in Yearn.Finance, it will be best to find a broker that supports your preferred payment method - which will ultimately make the process easier for you.
Storage and Cashing Out
A majority of beginner investors assume that the investment process is over once you buy Yearn.Finance tokens. However, when it comes to cryptocurrencies - it is equally important to store your coins safely and securely them until you are ready to cash out.
It is common for investors to choose a private digital wallet for storing their digital assets like Yearn.Finance. However, it takes a bit of experience in the crypto market to figure out which providers offer the best security for your tokens.
Moreover, this also means that you will have to move your Yearn.Finance coins back and forth every time you buy or sell.
If you are a beginner, the easier alternative would be to choose a regulated broker that integrates an in-built wallet functionality. Online broker eToro, in particular, is a great option in this regard.
As the brokerage site is heavily regulated, you will be able to securely store your Yearn.Finance tokens on the platform.
This way, you do not have to bother yourself with withdrawing your Yearn.Finance coins after making a purchase. Instead, you will be able to cash out your investment directly from your eToro portfolio, and the proceeds can be withdrawn to your original payment method.
How to Invest in Yearn.Finance Today - Step-by-Step Walkthrough
At this point in our How to Invest in Yearn.Finance Guide, we have provided you with all the key points you need to know about investing in this digital asset.
To end our guide, we will give you clear step-by-step instructions on how to set up a brokerage account and start investing in Yearn.Finance using regulated broker eToro.
Step 1: Open an Account
To start, visit the eToro website and click on the 'Join Now' button. You can proceed by providing your email address, a username and by setting a password to open your account.
The next step is to fill in some personal information - such as your full name, address, contact details, and date of birth.
In order to understand your investor profile, eToro will also ask you a number of questions - a step that you can complete in less than a minute.
Step 2: Provide Some ID
As a regulated broker, eToro is mandated to perform identity verification for all its registered users. This means that you will have to provide a government-issued photo ID to complete the registration process.
In addition, you will also have to submit a document as proof of address - like a recent utility bill or tax statement.
This KYC process is entirely automated - meaning, you will receive an email confirming your account on eToro within a few minutes.
Step 3: Make a Deposit
Before you can make any Yearn.Finance investments, you will first need to transfer some funds to eToro. As we discussed earlier, you have multiple payment methods available to pick from.
If you choose a debit/credit card or an e-wallet like PayPal, you will be able to process your payment immediately. Alternatively, you can also choose to pay via wire transfer - however, this will require you to wait for up to seven days in order to complete the transaction.
Step 4: Search for Yearn.Finance
You can find Yearn.Finance on eToro by simply searching for the asset on the platform. Alternatively, you will also be able to find it listed under the tab ‘Trade Markets.'
Step 5: Complete Yearn.Finance Investment
On the Yearn.Finance trading page, specify that you want to buy YFI tokens to make an investment.
You can then proceed to enter how much you want to invest in Yearn.Finance When ready, click on 'Open Trade' to complete your investment. The YFI tokens you bought will be added to your eToro portfolio straightaway.
Step 6: Cash Out Your Yearn.Finance Investment
At the time of cashing out, you can visit your eToro portfolio and locate your Yearn.Finance investment. You will find the 'Sell' button next to the asset. Click on it and confirm the sale of your Yearn.Finance tokens.
The proceeds from the transaction will then be available for you to withdraw.
How to Invest in Yearn.Finance - The Bottom Line
As with any other investment, Yearn.Finance comes with its own advantages and risk factors. In our guide, we have listed all of the important aspects to examine when attempting to figure out whether Yearn.Finance is a good fit for your financial portfolio.
Crucially, as we have pointed out throughout this guide - you need to find a regulated broker that can give you easy access to Yearn.Finance. A commission-free platform such as eToro will not only allow you to make secure Yearn.Finance investments but also allow you to store your YFI tokens for free.
eToro – The Best Platform to Invest in Yearn Finance
eToro have proven themselves trustworthy within the Crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
How to invest in Yearn.Finance?
The easiest and most cost-effective way to invest in Yearn.Finance is via a regulated and commission-free crypto broker like eToro.
What is the highest price of Yearn.Finance?
On May 12th, 2021, the price of Yearn.Finance hit an all-time high of $88,287.37 per coin - which is also the highest value ever attained by a cryptocurrency.
Is Yearn.Finance safe?
Launched in early 2020, Yearn.Finance has established itself as one of the most popular DeFi protocols in the market. It is also widely considered a safe platform that can securely store your crypto assets and provide you with earning opportunities.
How can I store my Yearn.Finance tokens?
Being a cryptocurrency, Yearn.Finance can be stored only in a secured digital wallet. The most convenient method for you would be to choose a regulated broker like eToro that offers integrated wallet services for the safe storage of your YFI coins.
What is the minimum amount required to start investing in Yearn.Finance?
On eToro, you can start investing in Yearn.Finance from $25.