Is Yearn Finance Legit? (Day 149)
Everybody is talking about Yearn Finance--couple weeks ago the news was out that the YFI token is more expensive than Bitcoin. At the time of writing, YFI token is ranked 25 from coinmarketcap, trading at $30,955.31 per token versus BTC price at $11,354.61.
YFI gets to profit from the fees (commission and gas fees) and they have $906.3M USD locked in their contracts (ranked #5). That's a LOT of money locked in a smart contract clearly saying it's in beta and use at your own risk!
If you look at the yield (I don't really know what their time frame from this yields, it's not mentioned anywhere obvious): WETH at 87.44% (while Ether has been generating yields in other platforms < 1%), DAI at 79.67%!!!
With > $900M locked-in. If these yields are true, they will suck up all the profits from DeFi!!!
Just talking some common sense, if a person found a way to generate a 80%+ yield, he could quietly raise money or just roll his own money and get super wealthy, why would he post it for the public, and how sustainable such yields can continue?
If you look at the Github smart contracts, it has a strategy DForce--a controversial platform that famously got hacked and accused of copying Compound, even though they have recovered--and all the check in comment as "test"...
I'm told that the main developer and founder of Yearn Andrew Cronje is like Elon Musk of DeFi. Yearn is a rebrand of the iearn finance. The hype is incredible.
What's your experience with Yearn? Do they really generate the yields as they promised?
Major risk with DeFi platforms that have underlying smart contracts is the unknown exploits - these are either audited by the community or never audited. YFI seems to be audited unlike YAM. If there is any vulnerability or bug exploited by hackers, it could completely drain out from the contracts leaving users in the middle of no where.
That's the disclaimer for anything experimental. If someone knows what they are doing and are experimenting with funds that they are okay to lose, they can do that. Not a financial advice.
Heh, I'm sure it's not gonna be another yam.