If there's one word that's on the tip of every crypto enthusiast’s tongue this year then that word is DeFi. As the cryptocurrency market went from strength to strength in 2021, projects like Yearn Finance have been pushing the boundaries of what blockchain technology can do and this has inevitably attracted the attention of investors worldwide.
Yearn Finance is actually a suite of products built on the Ethereum blockchain. In its most basic sense, it allows crypto holders to deposit their currency and earn yields. But what makes the protocol special is the way it allows those staking their cryptocurrency to maximize their returns by automatically switching between lending protocols on their behalf.
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Much like Uniswap, Compound and AAVE, Yearn Finance is one of several DeFi Project that has gained much attention in recent months and the price of its native token, YFI, has seen significant price growth since the start of 2021.
So what exactly makes Yearn Finance different from the other DeFi protocols on the market? And is it likely to be a good investment over the mid to long-term? In the following Yearn Finance price prediction, we’ll take a closer look at exactly what the project offers and what leading analysts are predicting for its future as an investment opportunity.
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A Brief Overview of Yearn Finance
Before we take a closer look at Yearn Finance it's worth pointing out that the inner workings of the project are highly complex and going into significant detail is far beyond the scope of this article. however, we shall endeavour to provide an overview of the project to allow potential investors to understand the service it provides.
Yearn.Finance was launched in July 2020 by independent developer Andre Cronje. What Cronje wanted was a means to automate liquidity mining - rather than constantly have to move his crypto in and out of different DeFi projects, according to whichever had the most favourable rates of return.
What Yearn Finance does is effectively offer a switching service. Users deposit their stablecoins into pools which the Yearn protocol then effectively puts into other DeFi projects, such as AAVE or Compound, according to whichever one has the best returns for that coin at that time. The more users the network has, the better the Yearn protocol can put their tokens to work by splitting holdings between multiple DeFi projects to maximise returns.
So in a nutshell, Yearn Finance is a project set up for yield farming. As with most DeFi projects, it starts off with users providing liquidity to the network’s various pools, an action for which they are rewarded with interest. However, what makes Yearn Finance special is the sophisticated ways in which it puts the coins in said pools to work.
In reality, the project can be seen as a portal to other DeFi exchanges - a kind of Blockchain financial advisor that chooses the best investment strategy for the crypto funds locked into the network.
Inevitably, Yearn Finance is a very complicated system, but the project offers various tools to make things easier for traders. These include Zap - access point for Zapper.fi (which simplifies the process of taking complex investment positions) and Cover, which offers access to Nexus Mutual (which offers a simple way for users to hedge smart-contract risk on Yearn).
Read Also: Could Yearn.Finance be a Millionaire-Maker Coin?
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
What Exactly Is Yearn Finance YFI For?
If you’re interested in investing in Yearn Finance then the best way to do so is by acquiring its native cryptocurrency, YFI. The token has already seen some very impressive price movement and at the time of writing it is one of the higher value coins out there, trading at $42,361 per token. But what exactly is YFI used for?
YFI is the governance token of the Yearn Finance network. This means that users who hold the token get to vote on the direction of the project, including protocol upgrades and even the investment strategies used by some of the Yearn Vaults.
Users can earn YFI by depositing capital into the Yearn protocol and providing liquidity to the various products. YFI holders also earn a share of the fees that other users pay for using the service.
Looking at Yearn Finance’s Price History
As with the governance tokens of many other DeFi projects, Yearn’s YFI started trading at a high price, hitting around $790 in its first few days of trading. The token has since seen its value soar and has yet to dip back below $1,000 at any point since its launch.
After just over a month of trading, YFI experienced its first major price surge. In August, prices soared from $5,290 to over $35,059 - representing growth of over 560% for the month. September saw another massive price spike when YFI reached as high as $43,337.
The last few months of 2020 saw Yearn Finance go into something of a decline, with prices sinking to $8,520 by November. However, the lull appeared to be short-lived and YFI was soon back on an upward trajectory, climbing back to $24,596 before the month was out.
Yearn continued a fairly steady rate of growth until February 2021, when the price of YFI suddenly shot up to $47,117 following renewed interest in DeFi projects. Yearn didn’t hold this for long though and prices sank back below the $40k mark for much of March.
April saw YFI hit a new high of $53,228 before YFI experienced a somewhat chaotic month in May. The token reached an all-time high of $90,786.89 on May 12, before tanking to $33,003 in less than two weeks.
Since then, the price of YFI has moved in both directions, but at the time of writing was holding relatively steady at around $24,295.32.
Don't Miss: Yearn Finance Price Predictions
Yearn Finance and Curve - a Recipe for Success?
One thing investors should consider when looking at Yearn Finance is its connection to Curve - another DeFi project that acts as an Automated Market Maker, providing a means for traders to buy, sell and exchange cryptocurrencies via its own liquidity pools.
What has this to do with Yearn Finance? Well, quite a lot. Yearn relies on Curve for one of its key features - the Yearn Vaults. Vaults are effectively pre-set trading strategies that identify the best possible DeFi investments. It does this by placing the user’s liquidity into yield farming strategies according to the particular setting of the vault chosen.
In fact, most of Yearn Finance’s liquidity has been generated through Curve’s yCRV pool token, which was in high demand when YFI yield farming really took off in 2020. Many have gone as far as to say that Yearn has a parasitic relationship with Curve.
This means that YFI’s fortunes are, in theory at least, linked to those of curve. Therefore, investors monitoring YFI also need to keep a close eye on Curve - particularly the amount of crypto that’s locked up in both projects.
What’s Next: Yearn Finance Price Predictions for 2025
Yearn Finance is one of the leading lights in the DeFi movement and it stands to reason that many analysts are predicting growth for its native token in the coming months, but what about over the longer term?
Looking ahead to 2025, WalletInvestor is expecting Yearn Finance to start growing, after dropping in value the previous years. According to its technical analysis, YFI will be trading at $23,040.60 before the end of 2022 then the price will decline. By 2023, Yearn is expected to have gone down to the $2,741.04 mark and by the time 2025 comes around, it will have reached $2,311.28.
Elsewhere, DigitalCoinPrice has made a lot more optimistic Yearn Finance price prediction for 2025. It has YFI closing 2022 at $32,042.34 and growing in the next years, reaching $55,000 in 2025 and ending that year at $49,622.46.
A less optimistic Yearn Finance price predictions, Coin Price Forecast has YFI reaching $31,526 by the end of 2022 and continuing to rise at an exponential rate over the next few years, declining to $50,978 by 2025.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Looking Further Ahead: Yearn Finance Price Predictions for 2030
Of course, the cryptocurrency market changes quickly and any long-term price predictions should be seen as merely suggestive predictions, based on there being no major disruptions to the market. But looking even further ahead, Yearn Finance price predictions for 2030 offer a good indication of current market sentiment.
DigitalCoinPrice, for example, clearly believes DeFi is here to stay. It has Yearn Finance YFI continuing to appreciate at an impressive rate, reaching $82,271.69 in 2028 and briefly breaking the $102k mark in 2029, before finishing the year at $100,247.81. This would represent growth of 312.89% on today’s YFI price.
Elsewhere, Coin Price Forecast has made its ten-year Yearn Finance price prediction - and whilst the platform is known for making somewhat optimistic forecasts, on this occasion, it seems to be quite realistic. Interestingly, the platform has Yearn Finance YFI reaching $64,836 in 2028, and growing slowly over the next couple of years, closing 2030 at $67,813.
A cryptocurrency research firm by the name of Crypto Research Report is calling for Yearn Finance (YFI) to reach $79,000 by 2025, and $291,000 by 2030.
Once again, these predictions are highly speculative and should not be used as the basis for investment - they simply serve as an indication of the potential that analysts see in Yearn Finance over the coming years.
Conclusion: Should You Invest in Yearn Finance?
The cryptocurrency market has seen many trends come and go, but it seems that DeFi is very much here to stay. In fact, protocols like Uniswap, Compound and Yearn Finance could be said to have breathed new life into the world of crypto investment.
There’s no denying that Yearn Finance is one of the leading projects in the space - with around $4.1 billion locked into the protocol, it has already gained enough momentum to compete with any of the yield farming projects currently on the market.
That being said, we have already seen how Yearn is reliant on Curve to operate effectively, which means that if Curve sees its fortunes change, so may Yearn Finance. It’s also worth pointing out that DeFi is a relatively new phenomenon, so it’s hard to say how things may pan out in future.
However, if you’re looking to invest in DeFi then Yearn Finance YFI is certainly worth considering. As we have seen, most analysts are predicting growth for Yearn Finance and the project certainly has the technical credentials to prove its worth in the coming years.
Despite the relatively high price per token, DeFi has also proven that it can go a lot higher, so now could well prove a good time to add it to your portfolio.
Check Out: Seven Reasons Why You Should Invest In Yearn Finance (YFI) Today
Where To Invest In Yearn Finance
If you like the sound of Yearn Finance as an investment opportunity, then you might want to consider adding YFI to your portfolio. To do this, you’ll need to find an exchange that lists the token. Whilst YFI is currently extremely sought after, it is relatively new and not offered by some trading platforms.
One platform that lists the token is eToro. We usually recommend eToro for crypto investors, as it has a solid reputation in the industry and provides a quick and easy way of investing in cryptocurrency via its intuitive trading platform.
eToro – The Best Platform To Buy Yearn Finance
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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
FAQs
What is Yearn Finance?
Yearn Finance is a DeFi project that effectively serves as a kind of robo-advisor, choosing the best investment strategy for network users who are looking to put their cryptocurrency to work via yield farming.
How much will Yearn Finance be worth in 2025?
Most crypto analysts see a huge amount of potential in Yearn Finance YFI, with some predicting it will be worth over well over $55k by 2025. Other predictions are more conservative, but there is generally an upward trend predicted across the board.
Is Yearn Finance better than Compound?
Yearn Finance offers a switching service for finding the best liquidy mining strategies, whereas Compound is primarily a crypto lending platform. In fact, Yearn can potentially use Compound as a place to deposit the crypto holdings of its users, if it offers the best return. Comparison is a little difficult, as the protocols effectively work in conjunction with one another.
Is now a good time to invest in Yearn Finance?
DeFi is one of the fastest-growing elements of the cryptocurrency world and it seems to have accelerated in the first half of 2021. As such, if you are looking to invest in DeFi then now could be a good time to acquire a YFI holding.
What are Yearn Finance price predictions for 2030?
Long term price predictions are best seen as guesswork when it comes to cryptocurrency - the market changes far too quickly for accurate forecasts beyond just a few months. However, they can tell us a lot about current market sentiment and most analysts are optimistic when it comes to Yearn Finance price predictions. Coin Price Forecast, for example, sees YFI reaching $67,813 by 2030.