Yearn.finance’s governance token, YFI, has continued its ascent for the umpteenth day in a row. On Aug. 31, the price of the prominent Ethereum-based coin seriously flirted with the $40,000 price point, passing into the $39,000s for a number of hours.
The coin has since retraced back to $35,000 according to Cryptoslate market data as the market takes focus on Ethereum and other large-cap cryptocurrencies.
Regardless, the asset is still up more than 1,000,000 percent (really) from its July launch price of $3 as reported by CryptoSlate earlier.
Yearn.finance’s governance coin shoots towards $40,000 as DeFi craze continues
The DeFi coin’s continued strength, with a failure to pullback, comes on the back of a number of trends.
Andre Cronje, lead developer of the project is expected to soon release a new product called “yETH.” yETH will be a product that allows DeFi users to obtain large amounts of returns on their Ethereum holdings. Analysts expect this product launch to drive ETH higher, along with YFI, which accrues value from investors depositing capital into yETH.
Also, part of YFI’s rally is being fueled by SushiSwap.
The Uniswap clone recently began a yield farming operation that offers individuals the opportunity to mint SUSHI, its native governance token, by depositing Uniswap liquidity tokens. One such liquidity token is for the YFI-ETH pool; as can be seen in the price action of other coins supported by SushiSwap, capital is being spent to purchase YFI as demand for SUSHI farming increases.
Vitalik Buterin is steering far away from YFI… for now
Vitalik Buterin, acknowledging a tweet about the strength of YFI’s community, recently remarked that he will be steering away from yield farming. As reported by CryptoSlate previously
, the Ethereum founder remarked on the subject matter:
“I personally am steering clear of the yield farming space completely until it settles down into something more sustainable. But I’m not particularly a “smart mind in defi” so….”
On why he doesn’t think DeFi’s current meta is sustainable, the crypto pioneer has drawn attention to the inherently unsustainable nature of the incentives to use DeFi at the moment:
“It’s a short-term thing. Once these enticements disappear, you could easily see the yield rates drop back down to close to 0%. […] That’s not something that could make DeFi break, but it should definitely be a sign that [this isn’t something] we should be pushing it out in front of the entire world [right now].”
Crypto projects are issuing coins to the tunes of millions of dollars a day, suppressing prices over time, driving down yields.
This hasn’t really been a large problem as there’s been a seemingly endless stream of capital coming into the Ethereum and DeFi space, but Buterin and others think it will eventually end, especially once the projects all become copy-cats of one another.
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